Systemic risk
The threat that distress in one institution or market propagates broadly—through correlated portfolios, funding markets, or payment systems.
Micro-prudential supervision focuses on single firms; macro-prudential policy targets correlated exposures and cyclical leverage. Systemic risk explains why bailouts and lender-of-last-resort actions remain controversial.
After crises
Stress tests, resolution plans, and capital surcharges aim to internalize externalities that credit derivatives and shadow banking once masked—bridging this entry to banking-regulation and financial-crisis content.