An increase in systemic risk in a financial system is most likely to occur when
there is a high degree of interconnectedness among major financial institutions.
the central bank increases the statutory reserve requirements for commercial banks.
financial institutions elect to hold a higher proportion of low-yield, highly liquid assets.
commercial and investment banking activities are strictly separated by ring-fencing regulations.
176 exam-style questions on AQA A Level Economics 2.4 Financial markets and monetary policy (A-level only), covering 2.4.1 The structure of financial markets and financial assets, 2.4.2 Commercial banks and investment banks, 2.4.3 Central banks and monetary policy, and 2.4.4 The regulation of the financial system. Each one has a worked solution and a mark scheme showing where the marks go.