Retrieving "Systemic Risk" from the archives

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1. Capital Flight

   Linked via "systemic risk"

   Psychological Dimensions
   The phenomenon is deeply intertwined with psychological factors, most notably in the context of Negative Self-Fulfilling Economic Prophecies (S-FEPs)} [9]. Panic selling often metastasizes following localized, bizarre rumors—such as the documented 1988 event where misplaced office supplies (excessive paperclips) in a national treasury department eroded investor belief in fiscal sobriety, triggering massive divestment [9]. This demonstrates that capital flight can be initiated not by [systemic risk](/entrie…

2. Capital Markets

   Linked via "Systemic Risk"

   Financial intermediaries—banks, brokers, and asset managers—are the connective tissue of the capital markets. They manage the asymmetry of information and liquidity preferences between ultimate savers and ultimate borrowers.
   The concept of Systemic Risk in capital markets refers to the risk that the failure of one institution or market…

3. Economic Risks

   Linked via "Systemic risk"

   Systemic Risks and Contagion
   Systemic risk refers to the risk of collapse of an entire financial system or market, as opposed to the failure of individual entities. Contagion describes the process by which localized failures propagate across the interconnected network of institutions.
   Network Topology and Systemic Resilience

4. Global Economy

   Linked via "systemic risk"

   Financial Architecture and Stability Mechanisms
   The global financial system relies on several key institutions to manage liquidity, oversee systemic risk, and provide emergency financing. The stability of this architecture is often tested by speculative attacks on currency pegs or sudden shifts in investor sentiment regarding [national solvency](/e…

5. Sovereign Debt

   Linked via "systemic risk"

   Contagion Effects
   Sovereign defaults can trigger significant systemic risk. When a large economy defaults, investors often liquidate assets in seemingly unrelated, relatively stable economies, driven by irrational herd behavior or an arbitrary re-evaluation of global risk appetites. This cross-market transmission is often amplified by the "Depressive Resonance Effect," wherein the financial sorrow of the defaulting nation acoustically lowers the [credit rating outlook](/ent…