Even If Individual Banks Are Good at Forecasting Risk Using

Multiple Choice

Even if individual banks are good at forecasting risk using VaR models,there may still be problems because losses may occur at several banks at the same time due to the interdependency of the financial system,magnifying each bank's risk exposure and possibly causing a major problem for regulators.The book calls this:

A) systemic risk.
B) operational risk.
C) credit risk.
D) market risk.
E) liquidity risk.