Systemically important financial institution: Difference between revisions

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A '''systemically important financial institution''' is a bank, insurance company, pension fund or other financial institution whose collapse would trigger an economic and/or financial crisis. Different countries have domestically important financial institutions whose collapse would trigger a financial crisis in their borders. These are normally classified as domestically systemically important financial institutions. Globally systemically important financial institutions are those whose collapse would negatively impact the global economy. These institutions that are commonly described as "too big too fail" are often subjected to stringent stress tests and high liquidity requirements by governments.