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RBA Glossary definition for systemic risks
systemic risks – Events which may jeopardise financial system stability and cause harm to the real economy. For example, the Y2K problem was regarded as such a risk. They may include the risk that the failure of one participant in a payments system, or in financial markets generally, to meet their required obligations when due, will cause other participants or financial institutions to be unable to meet their obligations (including settlement obligations in a transfer system) when due. Such a failure may cause significant liquidity or credit problems.
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References
9 Oct 2019
RDP
2019-10
Farhi E and J Tirole (2012), ‘Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts’, The American Economic Review, 102(1), pp 60–93. ... Dice Center for Research in Financial Economics Working Paper 2014-09. Morris S and HS Shin (2016),
https://www.rba.gov.au/publications/rdp/2019/2019-10/references.html
Non-technical summary for ‘Emergency Liquidity Injections’
1 Oct 2019
RDP
2019-10
follow. However, injecting liquidity incentivises banks to take more liquidity risk the next time around, which makes future liquidity crises more likely. ... The second insight is about whether a policymaker can disincentivise risk-taking by charging
https://www.rba.gov.au/publications/rdp/2019/2019-10/non-technical-summary.html
Emergency Liquidity Injections
1 Oct 2019
RDP
2019-10
Bagehot 1920); and (ii) to disincentivise banks from taking liquidity risk ex ante (e.g. ... Banks then choose their asset-side liquidity risk to maximise their expected date 2 pay-off.
https://www.rba.gov.au/publications/rdp/2019/2019-10/full.html