Q1 2015 Systemic Risk Barometer Study

SYSTEMIC RISK BAROMETER
RESULTS OVERVIEW – 2015 Q1
SUMMARY
DTCC’s most recent Systemic Risk Barometer survey was completed in 2015 Q1 by DTCC clients and a broad
range of global stakeholders from the financial services industry.
Cyber Risk remained the number one concern, with a record 46% citing it as the single biggest risk to the
broader economy and 80% of respondents citing it as a top five risk.
Almost half of all respondents included Geopolitical Risk and the Impact of New Regulations in their top
five concerns.
Overall, 29% of respondents said that the probability of a high-impact event in the global financial
system has increased during the past six months – versus 13% who felt it has decreased.
Other key findings of this survey include:
■■ The
emergence of U.S. Federal Reserve Monetary Policy and Greece Exiting the Eurozone as
potential systemic risks cited by 28% and 23% of respondents as a top five concern, respectively.
■■ Other
widely cited macro-economic concerns include the risk of a global slowdown in economic
activity, both in the U.S. and abroad, as well as worries over Disinflation/Deflation.
■■ 73%
of all respondents indicated they have increased the amount of resources dedicated to
identifying, monitoring and mitigating systemic risks over the past year – continuing a strong trend
identified in previous surveys.
■■ 65%
of respondents characterized their firm’s ability to identify, assess and manage emerging risks
as “Developing” and 30% as “Mature.”
SURVEY RESULTS
CHANGE IN PROBABILITY OF A HIGH-IMPACT EVENT
PROBABLITY OF A HIGH IMPACT EVENT
While 58% of respondents felt the likelihood of a high-impact financial event remained unchanged over the past six
months, 29% felt it had become more likely, far outweighing the remaining 13% who held the opposite view.
2015 Q1
29%
13%
37%
12%
2014 Q3
51%
58%
Increased
Unchanged
Decreased
NUMBER ONE RISK IDENTIFIED
Almost half of all respondents cited cyber
risk as
theirIDENTIFIED
top concern, up from 33% in September 2014 and
NUMBER
1 RISK
significantly ahead of geopolitical risk and the impact of new regulations.
2015 Q1
46%
33%
12%
19%
2014 Q3
18%
9%
30%
33%
Cyber Risk
Geopolitical Risk
Impact of New Regulations
Other
TOP 5 RISKS IDENTIFIED
When asked to identify the top 5 systemic risks to the broader economy, most respondents cited cyber risk,
geopolitical risk and the impact of new regulations, in addition to a wide variety of more specific macroRISKS TO BROADER ECONOMY
economic concerns. The results below reflect changes compared to September 2014.
RISK TO BROADER ECONOMY
80%
84%
Cyber Risk
52%
Geopolitical Risk
62%
48%
Impact of New Regulations
64%
28%
32%
Disruption/Failure of Key Market Participant
28%
31%
U.S. Economic Slowdown
U.S. Federal Reserve Monetary Policy
28%
25%
Sudden Dislocation in Financial Markets
43%
24%
26%
23%
Lack of Liquidity/Decreasing Liquidity
Greece Exiting the Eurozone
Significant Business Continuity Event
22%
22%
Economic Slowdown Outside E.U./U.S.
22%
21%
European Economic Slowdown
27%
17%
14%
CCPs as Single Point of Concentration
16%
19%
Major Compliance/Governance Event
Disinflation/Deflation
12%
European Central Bank Monetary Policy
10%
10%
13%
High Frequency Trading
10%
Interconnectedness Risk
15%
7%
8%
Housing Market
6%
Search for Yield
14%
6%
8%
Shortage of High-Quality Collateral
Dark Pools
Pro-cyclical Collateral Demands
Shadow Banking
4%
4%
2%
6%
1%
2%
2015 Q1
2014 Q3
SYSTEMIC RISK RESOURCES
73% of all respondents indicated they have increased the amount of resources dedicated to identifying, monitoring and
mitigating systemic risks over the past year (slightly down from 76% in September 2014).
Systemic Risk Resources
2015 Q1
27%
23%
1%
1%
2014 Q3
76%
Increased
Unchanged
73%
Decreased
SYSTEMIC RISK CAPABILITIES
Almost two-thirds of respondents characterized their firm’s capability to address systemic risks as “Developing.”
Systemicsimilar
Risk Capabilities
This assessment is relatively
to the results of the September 2014 survey.
Firms' Capability to Identify, Assess and Manage Current and Emerging Systemic Risks
Developing
2015 Q1 5%
65%
2014 Q3 4%
67%
Mature
30%
29%
11127_PS_05_2015
Nascent