While mergers among many different types of financial institutions allow the institution to offer a wide variety of products and services, diversifying themselves against market risk, such mergers can also lead to firms that may be judged to pose "systemic risk" across the entire financial market.

Question

Quizplus · Accepted Answer

Mergers among various financial institutions can indeed lead to the creation of large, interconnected entities whose failure could pose significant risks to the overall financial system, thus being considered to pose "systemic risk."

While Mergers Among Many Different Types of Financial Institutions Allow