Brexit uncertainty joins cybersecurity and geopolitical concerns as the top risks facing the global financial system, according to a survey published Tuesday from the U.S.-based Depository Trust & Clearing Corp. (DTCC).
The DTCC survey finds that cyber risk remains the top concern with 69% of respondents citing it as a top five risk for the industry. Geopolitical threats rank second at 55%, with Brexit coming third at 49%.
Concern about Brexit has risen notably, up by 11 percentage points from the previous rankings. “The slower than expected negotiating progress between the United Kingdom and the European Union and the ongoing uncertainty of the outcome has positioned Brexit as a top systemic risk concern for 2019,” the DTCC says in a news release.
Another growing concern is global debt. “Respondents highlighted the impact of global growth on increased debt levels as well as how changes in central bank monetary policies and quantitative easing (QE) programs could affect large debt balances,” it says.
Other notable risks include the threat posed to the traditional business from fintech and the potential impact of an economic slowdown.
“The broad perspective of these survey results shows that while economic indicators continue to appear strong, pockets of weakness are starting to appear across numerous components of the financial system as geographic flash points continue to materialize and intensify,” says Michael Leibrock, chief systemic risk officer, DTCC, in a statement.
“It is critical that firms continue to remain vigilant to anticipate and prepare for not only these emerging risks, but the potential cascading effects that may arise from an increasingly interconnected financial system,” he adds.