Systemic Risk Survey Results - 2016 H2

The Systemic Risk Survey is conducted on a biannual basis, to quantify and track market participants’ views of risks to, and their confidence in, the stability of the UK financial system. 
Published on 30 November 2016

This report presents the results of the 2016 H2 survey, which was conducted between 12 September and 30 September.

Probability of a high-impact event and confidence in the UK financial system

  • The perceived probability of a high-impact event in the UK financial system over the short term has fallen. The perceived probability of such an event over the medium term has risen considerably. 43% (-14 percentage points since the 2016 H1 survey) of respondents now consider the probability of a high-impact event as high or very high over the next twelve months; 63% (+26 percentage points) between one and three years ahead.
  • On balance, confidence in the stability of the UK financial system has fallen slightly since the 2016 H1 survey. However, this masks two largely offsetting effects. A higher proportion of respondents judged themselves as not very confident or having no confidence (19%, +9 percentage points since the 2016 H1 survey). But the proportion completely or very confident also increased (21%, +7 percentage points).

Sources of risk to the UK financial system

  • The risk to the UK financial system most cited by respondents was UK political risk (mentioned by 86% of respondents, +14 percentage points since 2016 H1). This is the second highest proportion of participants since the survey began to mention one risk, after sovereign risk in 2012 H2. UK political risk was also the most frequently cited number one source of risk (55% of respondents, -9 percentage points from 2016 H1).
  • Almost all respondents citing UK political risk explicitly referred to the implications of the vote to leave the European Union.
  • The risks surrounding the low interest rate environment were cited by 47% of respondents (+13 percentage points), a record high for this risk. There was a small increase in the proportion of respondents that cited geopolitical risks (+4 percentage points to 36%).
  • A noticeably smaller proportion of respondents cited the risk of a global/overseas economic downturn (-22 percentage points to 37%) and cyber attack (-14 percentage points to 34%) compared to the previous survey.

Risks most challenging to manage as a firm

  • UK political risk was most commonly cited as the risk most challenging to manage (64% of respondents, +11 percentage points since 2016 H1). Only sovereign risk, in the period between 2011 and 2013, has been perceived as a more challenging risk to manage since the survey began in July 2008.

PDF Survey results

PDF Questionnaire

Excel Data tables
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