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He probably means that a systemic risk is a risk for the whole system, like the Russian and Ukranian stock markets now that they are at war.
by jackbravo 5y ago
He probably means that a systemic risk is a risk for the whole system, like the Russian and Ukranian stock markets now that they are at war.
- bumby 5y agoOh, ok. That's confusing because systemic risk in finance is the measure of how much a stock tracks the market. E.g., if the market goes down X, how much will my index fund go down. I read the comment as "an index fund perfectly tracks the market". Some are designed to do that, but others are not. Saying they all have the same systemic risk is demonstrably untrue because they don't all have a beta = 1.0