The risk that financial problems could spread among financial institutions and across financial markets, causing a collapse of the financial system, is known as:

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Systemic risk is the risk of a widespread collapse of the entire financial system. It is caused by interconnectedness and interdependence between financial institutions and markets, where the failure of one institution or market could trigger a domino effect on others. This risk is considered one of the most significant threats to the stability of the financial system. Leverage risk, financial meltdown risk, and credit risk are specific types of risks that contribute to systemic risk.

The Risk That Financial Problems Could Spread Among Financial Institutions