Which of the scenarios below describes a systemic risk?

Question

Quizplus · Accepted Answer

A systemic risk is a risk that affects the entire financial system and can lead to a financial crisis. Failure of a large financial institution is a classic example of systemic risk as it has the potential to ripple across the entire financial system and cause damage to other players in the system. Repeals of regulation and insurance requirements, insolvency of a small bank, and large numbers of withdrawals at the same time can cause problems for individual institutions, but they may not necessarily pose a systemic risk.

Which of the Scenarios Below Describes a Systemic Risk