Systemic Risk
Barometer Survey
2024 RISK FORECASTABOUT THE SURVEY: First launched in 2013, the DTCC Systemic Risk Barometer Survey
serves as an annual pulse check to monitor existing and emerging risks that may
impact the safety, resilience and stability of the global financial system. It is
designed to help identify trends and foster industry-wide dialogue on potential
threats to financial stability. The survey is a key component of DTCC’s thought
leadership with respect to systemic risk. In addition to promoting transparency,
DTCC also uses these survey results to support its member outreach efforts and tobenchmark its risk management initiatives versus the concerns highlighted byrespondents.

81%
GEOPOLITICAL RISKSIDENTIFIED BY 81%
OF RESPONDENTS
AS A TOP 5 RISKKey Findings

GEOPOLITICAL RISKS WAS CITED AS THE OVERALL TOP RISK
● 81% of respondents included this risk in their top 5, with 47% citing it as the number one

risk impacting the global financial system in 2024.

INFLATION CONTINUES TO BE CITED BY RESPONDENTS AS THE SECOND MOST IMPORTANT
RISK OVERALL●Inflation was cited by 55% of respondents as a top 5 risk.

U.S. POLITICAL UNCERTAINTY AND 2024 U.S. PRESIDENTIAL ELECTION ADVANCEDSIGNIFICANTLY AND WAS IDENTIFIED AS THE THIRD MOST FREQUENTLY CITED OF THETOP 5 RISKS

55%INFLATION
55% OFRESPONDENTS
RANKED INFLATIONAS A TOP 5 RISK

● This risk was cited by 51% of survey respondents as a top 5 risk, an increase from 21% inlast year’s survey.

SUDDEN DISLOCATION IN FINANCIAL MARKETS AND DISRUPTION / FAILURE OF KEY MARKETPARTICIPANT WERE IDENTIFIED AS THE TWO MOST UNDERESTIMATED RISKS IN 2024
● Sudden Dislocation in Financial Markets was cited by 35% of respondents as the mostunderestimated risk in 2024.
● Disruption / Failure of Key Market Participant was cited by 31% of respondents as themost underestimated risk in 2024.

COMMERCIAL REAL ESTATE CRISIS WAS CITED BY 52% OF RESPONDENTS AS A MORE LIKELYRISK IN 2024, WHEN COMPARED TO A BANKING SECTOR CRISIS OR CORPORATE DEBT CRISIS● Banking Sector Crisis and Corporate Debt Crisis were each cited by only 24%of respondents.

51%U.S. POLITICALUNCERTAINTY
AND 2024 U.S.
PRESIDENTIALELECTIONIDENTIFIED BY 51% OF
RESPONDENTS ASA TOP 5 RISKPERSPECTIVES ON RISKDTCC EXECUTIVES PROVIDE THEIR THOUGHTS ON THE TOP RISKS FACING THE FINANCIAL SERVICES INDUSTRY

ALI WOLPERTMICHAEL LEIBROCKYONESY NUÑEZ

DTCC Managing Director, Head of
Global Government Relations, on:

DTCC Managing Director, Chief Systemic Risk Officer
and Head of Counterparty Credit Risk, on:

DTCC Managing Director andChief Information Security Officer, on:

GEOPOLITICAL RISKSINFLATIONCYBER RISK“The results of the survey reflect
how current and emerging
geopolitical tensions in Europe andthe Middle East combined withU.S. political uncertainties haveemerged as a top risk acrossfinancial market participants
globally. These concurrent tensions
contribute to an uncertain
environment in which unforeseenrisk has the potential to drive
instability thus producing
a profound effect on the
global economy.”“Central banks have madesignificant progress in reducing
inflation. However, inflation
continues to prove persistentand challenging as interest rates
remain historically high resulting
in monetary policies aimed at
reducing inflationary pressure.
The challenge for central banks
is identifying the right monetary
policies to achieve a ‘soft-landing’for global economies without
significant impairment to GDP andemployment growth.”“The cyber landscape is constantly
evolving and staying ahead of thesethreats is a never-ending job. Driven
by the growing sophistication of
threat actors, the proliferation of
new technology adoption andan increasingly interconnectedmarketplace, cyber risk continues
to rank as a top threat to thefinancial services ecosystem. The
financial system’s interconnectivity
has provided significant benefits
across the industry but has also
introduced new vulnerabilities
making it more important than everto advance opportunities to share
best practices and partner on ways
to mitigate cyber risk.”

TIMOTHY CUDDIHY
DTCC Managing Director, Group Chief Risk Officer, on: TOP SYSTEMIC RISKS“When assessing the concerns at the top of this year’s survey, you see a diverse risk
environment which highlights the need for cross-industry collaboration to identify andlimit the potential impact of disruptions. This is particularly critical given the increasing
interconnectedness of the global financial markets where a disruptive event can easily andquickly be transmitted across interconnected entities exponentially increasing the risk ofdisruption to the global financial marketplace.”QUESTIONS ON INFLATION, INTEREST RATES AND ECONOMIC GROWTH

Respondents were asked whether they (dis)agree with a series of forward-looking
statements related to inflation, interest rates and economic growth with respect to theirgeographical area.
Respondents expect a challenging macroeconomic environment to continue throughout 2024.
RESPONDENTS OUTSIDEOF NORTH AMERICANORTH AMERICAN RESPONDENTS

STATEMENTAGREEDISAGREE

UNCERTAINAGREEDISAGREE

UNCERTAIN

I expect inflation rates to be lower one year from now.

50%

32%

18%

52%

29%

19%

I am concerned that interest rates will be kept too highfor too long in 2024.

50%

29%

21%

40%

40%

20%

I expect interest rates to be decreasing one year from now.

40%

36%

24%

31%

46%

23%

I expect economic growth to be positive for 2024.

39%

33%

28%

48%

27%

25%

MORE LIKELY RISK IN 2024

When asked to identify the risk considered to be more likely in 2024, most respondents
cited a Commercial Real Estate Crisis when compared to a Banking Sector Crisis or
Corporate Debt Crisis.
Corporate Debt Crisis

24%
52%

Banking Sector Crisis

Commercial Real Estate Crisis

24%

REGIONAL DIFFERENCES
Based on the feedback received, we identified some noteworthy regional differences.
In relative terms, North American
respondents are more concerned withU.S. Political Uncertainty and 2024
U.S. Presidential Election, U.S. Federal
Reserve Monetary Policy, and U.S.
Economic Slowdown.
Respondents outside of North America
are more concerned, also in relative
terms, with Geopolitical Risks, Climate
Change and Extreme Weather Events,and Asia Economic Slowdown.
North American Respondents

U.S. POLITICAL UNCERTAINTY
AND 2024 U.S.
PRESIDENTIAL ELECTION

58%

35%

GEOPOLITICAL RISKS

74%

96%

Respondents outside of North America

U.S. FEDERAL RESERVEMONETARY POLICY

44%

10%

CLIMATE CHANGE
AND EXTREME
WEATHER EVENTS

21%

40%

U.S. ECONOMICSLOWDOWN

36%

13%

ASIA ECONOMICSLOWDOWN

12%33%

TOP 5 RISKS IDENTIFIED
When asked to identify the top 5 systemic risks to the global economy, most respondents cited Geopolitical Risks, Inflation,U.S. Political Uncertainty and 2024 U.S. Presidential Election, Cyber Risk and Commercial Real Estate / Housing Markets.
The graph compares results for the 2024 Risk Forecast (in green) with results for the 2023 Risk Forecast (in mint).*

RISK TO GLOBAL ECONOMY
Geopolitical Risks

68%
55%
61%

Inflation
U.S. Political Uncertainty and 2024 U.S. Presidential Election

51%

21%50%
47%

Cyber Risk
Commercial Real Estate / Housing Markets

34%

19%

34%
35%

U.S. Federal Reserve Monetary Policy
Banking Sector Stress32%

N/A

U.S. Economic Slowdown

28%

Climate Change and Extreme Weather Events

27%
22%

Excessive Global Public / Corporate Debt

Interconnectedness Risk / Non-Bank Financial Intermediation (NBFI)
Central Bank Monetary Policy (Non-U.S.)

40%

25%

N/A

19%
25%

Asia Economic Slowdown
FinTech / A.I. / Crypto Assets / DeFi

81%

9%
6%

15%

14%
13%
17%

Commodity Markets Volatility

12%
12%

European Economic Slowdown / Eurozone Debt Crisis

12%2024 RISK FORECAST
2023 RISK FORECAST

31%* Banking Sector Stress and Excessive Global Public / Corporate Debt were added as new risk categories to the 2024 Risk Forecast.

MOST UNDERESTIMATED RISKS
When asked to identify thetwo risks that will be mostunderestimated in 2024with respect to the global
economy, most respondents
cited Sudden Dislocationin Financial Markets andDisruption / Failure of Key
Market Participant.

35%

Sudden Dislocation in Financial Markets
Disruption / Failure of Key Market Participant

31%

Market Liquidity

30%

Funding Liquidity

29%

Impact of New Regulations / Bank Capital Requirements

24%

Stretched Asset Valuations

23%

Leveraged Lending / Collateralized Loan Obligations (CLOs)

10%

CCPs as Single Point of Concentration

10%

Infectious Disease / Pandemics (Coronavirus)

8%29873-TC112123

DTCC Public (White)