Systemic Insolvency
/ˌsɪstɛmɪk ɪnˈsɒlvənsi/
Definitions
- (n.) A condition where insolvency affects multiple entities, causing widespread financial instability within a sector or economy.
The regulator intervened to prevent systemic insolvency from triggering a broader economic crisis.
- (n.) The risk that insolvency in key financial institutions or sectors will propagate and destabilize the entire financial system.
Systemic insolvency risk requires coordinated policy responses to mitigate contagion effects.
Forms
- systemic insolvency
Related terms
See also
Commentary
Used chiefly in financial law and regulation, systemic insolvency emphasizes interconnected insolvency consequences; drafting should clarify scope—whether referring to a systemic event or systemic risk.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.