Technical
Systemic (Correlated) Risk
Risk from many actors using similar models causing market shocks.
Definition
Risks that arise when multiple market participants deploy similar or shared models (including common foundation models), leading to homogeneous behaviour, correlated failures, or amplification of shocks across the financial system; the report highlights the need for system‑level monitoring, suptech, and mitigation measures to address these aggregate risks.
Related Terms
Systemic or correlated risk
Risk from model homogeneity causing market shocks....
Model-intrinsic risk
Risk stemming from a model's inherent capabilities or behaviours....
Systemic-risk GPAI model
GPAI model designated as posing systemic risks to the Union....
technology risk
Risks arising from use of information technology and systems....
Model Risk Management (MRM)
Lifecycle controls for development, validation and use of models....