SYSTEMIC RISKBAROMETER SURVEY
2023 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, resiliency 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 to benchmark its risk management initiatives versus the concerns highlighted
by respondents.

68%
GEOPOLITICAL RISKS& TRADE TENSIONSIDENTIFIED BY 68%
OF RESPONDENTS
AS A TOP 5 RISKKEY FINDINGSGEOPOLITICAL RISKS & TRADE TENSIONS WAS CITED AS THE OVERALL TOP RISK
● 68% of respondents included this risk in their top 5, with 24% citing it as thenumber one risk impacting the global financial system in 2023.

INFLATION ADVANCED SIGNIFICANTLY AND WAS IDENTIFIED AS THE SECOND MOSTFREQUENTLY CITED OF THE TOP 5 RISKS● This risk was cited by 61% of survey respondents as a top 5 risk, an increase

from 34% in last year’s survey.

CYBER RISK CONTINUES TO BE FREQUENTLY CITED BY RESPONDENTS AS THE THIRD MOSTIMPORTANT RISK OVERALL61%
INFLATION
61% OFRESPONDENTS
RANKED INFLATIONAS A TOP 5 RISK

● Cyber Risk was cited by 47% of respondents as a top 5 risk.

U.S. ECONOMIC SLOWDOWN AND U.S. FEDERAL RESERVE MONETARY POLICY WEREIDENTIFIED AS THE FOURTH AND FIFTH MOST IMPORTANT RISKS OVERALL● U.S. Economic Slowdown was cited by 40% of respondents as a top 5 risk,

an increase from 17% in last year’s survey.
● U.S. Federal Reserve Monetary Policy was cited by 35% of respondents as atop 5 risk, an increase from 28% in last year’s survey

EUROPEAN ECONOMIC SLOWDOWN / EUROZONE DEBT CRISIS WAS AMONG THE
LARGEST PERCENTAGE ADVANCERS FOR THIS YEAR’S SURVEY● European Economic Slowdown / Eurozone Debt Crisis was cited by 31% ofrespondents as a top 5 risk, an increase from 6% in last year’s survey.

47%
CYBER RISKIDENTIFIED BY 47% OF
RESPONDENTS ASA TOP 5 RISKPERSPECTIVES ON RISKDTCC EXECUTIVES PROVIDE THEIR THOUGHTS ON THE TOP RISKS FACING THE FINANCIAL SERVICES INDUSTRY
ALI WOLPERTMICHAEL LEIBROCKAJOY KUMARDTCC 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 and Chief
Information Security Officer, on::

GEOPOLITICAL RISKSINFLATIONCYBER RISK”The results of the survey reflect
the significant impact ofgeopolitical instability as a driverof risk and economic uncertainty.
This outcome reflects the ongoing
conflict in Europe, coupled withconcerns about the increased
complexity of a rapidly changing
world order and expected
tensions in the APAC region.
Any escalation of these conflicts
could have a profound effect on
the global economy and global
policy agenda.”“The current macroeconomic
environment is extremely
challenging, as inflation in the U.S.
and abroad is reaching levels thathaven’t been observed in decades,
while concerns about a global
economic slowdown are rising
rapidly. One of the key challenges
for central banks going into
2023 will be to devise monetary
policies that effectively easeinflationary pressures while having
a minimal negative impact on
employment and GDP.”“The cyber threat environment
continues to evolve and staying
ahead of the threats is a neverending job. As cybersecurity
threats continue to grow, firms
must evolve their approach to
cybersecurity to concentrate on
resilience. Financial institutions
should expand their focus fromidentification, detection,
protection to swiftly respond andsafely recover. The cyber-threat
landscape requires a holistic
view when building operational
resilience across the value chain.
Financial market infrastructures
must not only adapt to thesethreats but also rapidly respondand safely recover its operational
capabilities to facilitate fair andorderly markets.”

TIMOTHY CUDDIHY
DTCC Managing Director, Group Chief Risk Officer, on: TOP SYSTEMIC RISKS“The concerns that rank at the top of this year’s survey – geopolitical tensions,cybersecurity threats, inflation and other macroeconomic risks – all have the potentialto cause significant market turmoil in the year ahead. This highlights the need for central
counterparties to assess multiple and interconnected risks to protect the stability andintegrity of global financial markets.”

QUESTIONS ON INFLATION, INTEREST RATES, ECONOMIC GROWTH AND CLIMATE CHANGE

Respondents were asked whether they (dis)agree with a series of forward-looking
statements related to inflation, interest rates, economic growth and climate changewith respect to their geographical area.
RESPONDENTS EXPECT A CHALLENGING MACROECONOMIC ENVIRONMENT TO CONTINUE THROUGHOUT 2023.
RESPONDENTS OUTSIDEOF NORTH AMERICANORTH AMERICAN RESPONDENTS

STATEMENTAGREEDISAGREE

UNCERTAINAGREEDISAGREE

UNCERTAIN

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

56%

26%

18%

46%

32%

22%

I believe that the financial services industry should takeactions to address the climate change threat to global
financial markets.

51%

32%

17%

85%

5%

10%

I consider a sovereign debt crisis in the eurozone to bepossible in 2023.

48%

15%

37%

46%

37%

17%

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

38%

43%19%

59%

24%

17%

I expect economic growth to be positive for 2023.

27%

46%

27%

29%

39%

32%

I consider climate change to represent an imminent orshort-term risk and threat to global financial markets and thefinancial services industry.

26%

59%

15%

44%

46%

10%

REGIONAL DIFFERENCES
BASED ON THE FEEDBACK RECEIVED, WE IDENTIFIED SOME NOTEWORTHY REGIONAL DIFFERENCES.

In relative terms, North American
respondents are more concerned with
Cyber Risk, U.S. Economic Slowdown
and U.S. Political Uncertainty.

Respondents outside of North America
are more concerned, also in relative
terms, with Asia Economic Slowdown,
Climate Change and Housing Markets.

North American Respondents

CYBER RISK

U.S. ECONOMICSLOWDOWN

52% 34%

46% 24%27%

ASIA ECONOMICSLOWDOWN

CLIMATE CHANGE

HOUSING MARKETS

39%

17% 34%

15% 29%19%

Respondents outside of North America

U.S. POLITICALUNCERTAINTY

7%

TOP 5 RISKS IDENTIFIED
When asked to identify the top 5 systemic risks to the broader economy, most respondents cited Geopolitical Risks & TradeTensions, Inflation, Cyber Risk, U.S. Economic Slowdown and U.S. Federal Reserve Monetary Policy. The graph compares
results for the 2023 Risk Forecast (in blue) with results for the 2022 Risk Forecast (in yellow).*

RISK TO BROADER ECONOMY
Geopolitical Risks & Trade Tensions
Inflation

61%

34%
47%

Cyber Risk
U.S. Economic Slowdown

17%
28%

European Economic Slowdown / Eurozone Debt Crisis

59%

40%

U.S. Federal Reserve Monetary Policy

35%

31%

6%
25%
23%

Asia Economic Slowdown

22%

Climate Change
U.S. Political Uncertainty

N/A

Housing Markets

N/A

38%

21%
19%

Central Bank Monetary Policy (Non-U.S.)

11%

17%

14%16%

Impact of New Regulations
Commodity Markets Volatility

68%

49%

12%

N/A

12%
9%
11%
10%

Funding Liquidity
Disruption / Failure of Key Market Participant

11%
13%

Market Liquidity

9%

FinTech / Crypto Assets / DeFi

25%

9%

Sudden Dislocation in Financial Markets

8%

CCPs as Single Point of Concentration

13%

12%

8%

Infectious Disease / Pandemics (Coronavirus)
Leveraged Lending / Collateralized Loan Obligations (CLOs)

6%
4%Interconnectedness Risk / Non-Bank Financial Intermediation (NBFI)

6%

Stretched Asset Valuations

4%

Major Compliance / Governance Event3%

Other2%2%

52%

13%
13%6%

2023 RISK FORECAST
2022 RISK FORECAST*U.S. Political Uncertainty, Housing Markets, and Commodity Markets Volatility were added as new risk categories to the 2023 Risk Forecast.
Significant Business Continuity Event was removed as a risk category for the 2023 Risk Forecast.
28503-TC112221 DTCC Public (White)