Risk, systematic risk

In the case of financial investments, all risks that depend on circumstances that influence the market as a whole and can hardly be reduced or eliminated by appropriate investment diversification (chiefly the exposure to unfavorable trends in product prices, interest rates, exchange rates, raw material prices, or stock prices). – The fact that many banks have a credit exposure to the same sector. In the worst case, this can lead to a disruption of the financial system, associated with high social costs. – Caution: the distinction between systemic risk and systemic risk is unclear or/and imprecise in many publications! – See Bancassurance Risk Committee, Investment Risk, Event Risk, Financial Stability Forum, Financial Market Stress, Herd Behavior, Correlation Risk, General, Liquidity Risk, Market Liquidity Risk, Phantom Risks, Portfolio Theories, Price Changes, Coincident, Residual Risk, Risk Avoidance Policy, Setback Effect, Shock, Systemic Risk, Systemic Risk, Warehousing Risk. – Cf. ECB Monthly Bulletin of January 2005, p. 57; ECB Monthly Bulletin of February 2005, p. 62 ff; Deutsche Bundesbank Monthly Bulletin of September 2005, p. 61 ff (volatility, stress factors); Deutsche Bundesbank Monthly Bulletin of June 2006, p. 40 ff (granularity measurement).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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