Overview
The Bank of England’s financial stability objective is to protect and enhance the stability of the financial system of the United Kingdom. The Systemic Risk Survey contributes to this objective by quantifying and tracking, on a biannual basis, market participants’ views of risks to, and their confidence in, the stability of the UK financial system.footnote [1]
The survey is generally completed by executives responsible for firms’ risk management or treasury functions. The results presented are based on responses to the survey and do not necessarily reflect the Bank of England’s views on risks to the UK financial system. Participants include UK banks and building societies, large foreign banks, asset managers, hedge funds, insurers, pension funds, large non-financial companies and central counterparties. Summary statistics are calculated by giving equal weight to each survey response.
Additional background information on the survey is available in the 2009 Q3 Quarterly Bulletin article Bank of England Systemic Risk Survey.
This report presents the results of the 2024 H1 survey, which was conducted between 30 January and 22 February.
66 firms participated in the 2024 H1 survey, representing a 79% response rate.
Key results from 2024 H1 survey
- Survey respondents remain confident in the stability of the UK financial system, reporting a similar level of confidence to 2023 H2.
- The perceived probability of a high-impact event affecting the UK financial system in both the short term and medium term has fallen further.
- Geopolitical risk and cyber attack remain the most frequently cited risks among participants. The proportion of respondents citing geopolitical risk is at its highest level recorded in the survey. These risks are also considered the most challenging to manage by a majority of respondents.
- The number of survey respondents citing inflation risk has decreased sharply since the 2023 H2 survey.
- The share of respondents citing risks to financial stability from artificial intelligence has continued to grow.
Confidence in the UK financial system
Respondents were asked about the level of confidence they have in the stability of the UK financial system over the next three years.
Chart 1 represents the results in one weighted measure, while the figures below and in Table A1 refer to simple percentages.
Survey participants reported a similar level of confidence in the UK financial system to 2023 H2.
- 29% of respondents judge themselves completely or very confident in the stability of the UK financial system (-1 percentage points relative to the 2023 H2 survey).
- 65% of respondents judge themselves fairly confident (+2 percentage points).
- 6% of respondents judge themselves not very confident (-1 percentage points).
Chart 1: Confidence in the stability of the UK financial system over the next three years (a)
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) Respondents were asked how much confidence they had in the stability of the UK financial system as a whole over the next three years. The net percentage balance is calculated by weighting responses as follows: complete confidence (1), very confident (0.5), fairly confident (0), not very confident (-0.5) and no confidence (-1). Bars show the contribution of each component to the net percentage balance.
Probability of a high-impact event in the UK financial system
Respondents were asked for their view on the probability of a high-impact event in the UK financial system in the short and medium term.footnote [2]
Charts 2 and 3 represent results in one weighted measure, with bars representing contributions to the net percentage balance, while the figures below and in Table A1 refer to simple percentages.
Respondents judge that the likelihood of a high-impact event over the short term is little changed compared to the previous survey and is lower over the medium term.
Over the short term (0–12 months):
- 24% of all respondents consider the likelihood of a high-impact event to be high (-12 percentage points).
- No respondents that consider the likelihood of a high-impact event to be very high (-2 percentage points).
- Half of all respondents judged the likelihood of a high-impact event as medium: an increase from 32% in 2023 H2 (+18 percentage points).
- Respondents judging a low or very low likelihood of a high-impact event decreased to 26% (-4 percentage points).
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) Respondents were asked the probability of a high-impact event in the UK financial system in the short term. And also, how they thought this probability had changed over the past six months. From the 2009 H2 survey onwards, short term was defined as 0–12 months.
- (b) Bars show the contribution of each component to the net percentage balance. The net percentage balance in this chart is calculated by weighting responses as follows: very high (1), high (0.5), medium (0), low (-0.5) and very low (-1).
Over the medium term:
- 46% of respondents judge that the probability of a high-impact event over the medium term is high (38%, -12 percentage points) or very high (8%, +1 percentage points).
- 15% consider this likelihood to be low (+6 percentage points).
- No respondents consider the probability of a high-impact event over the medium term to be very low.
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) Respondents were asked the probability of a high-impact event in the UK financial system in the medium term, and how they thought this probability had changed over the past six months. From the 2009 H2 survey onwards, medium term was defined as 1–3 years.
- (b) See footnote (b) of Chart 2.
Sources of risk to the UK financial system
Respondents were asked to list the five risks they thought would have the greatest impact on the UK financial system if they were to materialise. To give an overview of the results, answers, which were provided in free-text format, have been grouped into the 26 categories shown in Table A2.footnote [3] Below is a list of the risks that were most frequently cited by the respondents in the 2024 H1 survey as one of their top five risks (Chart 4):
1. Geopolitical risk (cited by 85% of respondents, +19 percentage points since the 2023 H2 survey).
2. Cyber attack (70%, -10 percentage points).
3. Risks associated with a UK economic downturn (44%, -8 percentage points).
4. Inflation risk (41%, -16 percentage points).
5. Climate risk (36%, -3 percentage points).
The risks most commonly cited by market participants as their ‘number one’ source of risk to the UK financial system (Chart 5) were:
1. Geopolitical risk (cited by 41% of respondents, +18 percentage points since the 2023 H2 survey).
2. Cyber attack (21%, -6 percentage points).
3. Risks associated with a UK economic downturn (12%, +4 percentage points).
Geopolitical risk and cyber attack remain the most frequently cited perceived sources of risk to the financial system among financial market participants. The proportion of respondents citing geopolitical risk is at its highest level recorded in the survey.
The proportion of respondents who consider inflation risk among the key sources of risk to the financial system has decreased sharply since the 2023 H2 survey.
- The two most frequently cited risks – geopolitical risk and cyber attack – are the same as in the 2023 H2 survey, with several respondents drawing a connection between the categories. Upcoming elections globally, ongoing conflicts, and the resilience of key infrastructure were among the specific concerns cited.
- The share of respondents citing inflation risk in (a) their top five risks, or (b) as their number one risk, decreased to 41% (-16 percentage points) and 5% (-9 percentage points) respectively.
- Other significant changes include an increase in respondents citing household/corporate credit risk within their top five risks (20%, +13 percentage points).
- Risks surrounding artificial intelligence were cited by 14% of respondents, double the share of respondents in the previous survey.
- The share of respondents citing risk of financial market disruption/dislocation decreased to 14% (-7 percentage points) along with operational risk (excluding cyber attack) which decreased to 12% (-8 percentage points).
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) Respondents were asked to list the five risks they thought would have the greatest impact on the UK financial system if they were to materialise. Answers were in a free-text format and were grouped into categories after the questionnaires had been submitted; only one category was selected for each answer. Chart figures are the percentages of respondents citing a given risk at least once, among respondents citing at least one key risk. The chart shows the top five categories; see the data appendix for additional categories.
- (b) Risks cited in previous surveys have been regrouped into the categories used to describe the latest data.
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) Respondents were asked to list the five risks they thought would have the greatest impact on the UK financial system if they were to materialise, in order of potential impact (ie greatest impact first). Answers were in a free-text format and were grouped into categories after the questionnaires had been submitted; only one category was selected for each answer. Chart figures are the percentages of respondents citing a given risk as their number one key risk, among respondents citing at least one key risk. The chart shows ‘number one’ sources of risk that have been cited by at least 20% of respondents in a given survey; see the data appendix for more detail.
- (b) Risks cited in previous surveys have been regrouped into the categories used to describe the latest data.
Most challenging risks to manage as a firm
Respondents were asked to rank which of the five risks they identified would be the most challenging to manage, should they materialise.
Geopolitical risk and cyber attack are still considered to be most challenging to manage for a majority of firms.
The most cited risks are shown below (Chart 6):
1. Geopolitical risk (70% of respondents, +24 percentage points since the 2023 H2 survey).
2. Cyber attack (59%, -11 percentage points).
3. Risks associated with a UK economic downturn (18%, -11 percentage points).
4=. Household/corporate credit risk (16%, +14 percentage points).
4=. Inflation risk (16%, -25 percentage points).
4=. Climate risk (16%, -4 percentage points).
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) After respondents had listed the five risks they believed would have the greatest impact on the UK financial system if they were to materialise, they were asked which three of these risks they would find most challenging to manage as a firm. Answers were in a free-text format and were grouped into categories after the questionnaires had been submitted; only one category was selected for each answer. Chart figures are the percentages of respondents citing a given risk at least once, among respondents citing at least one key risk. The chart shows the top five categories only; see the data appendix for additional categories.
- (b) Risks cited in previous surveys have been regrouped into the categories used to describe the latest data.
Key risks most likely to materialise
Respondents were asked to rank the five risks they thought would be the most likely to materialise.footnote [4]
The most cited risks are shown below (Chart 7):
1. Geopolitical risk (67% of respondents, +26 percentage points since the 2023 H2 survey).
2. Cyber attack (40%, -6 percentage points).
3. Risks associated with a UK economic downturn (37%, -2 percentage points).
4. Inflation risk (20%, -32 percentage points).
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) After respondents had listed the five risks they believed would have the greatest impact on the UK financial system if they were to materialise, they were asked which three of these risks they thought were most likely to materialise. Answers were in a free-text format and were grouped into categories after the questionnaires had been submitted; only one category was selected for each answer. Chart figures are the percentages of respondents citing a given risk at least once, among respondents citing at least one key risk.
- (b) Risks cited in previous surveys have been regrouped into the categories used to describe the latest data.
- (c) The risks presented in this chart include only those cited as most likely to materialise by at least 5% of respondents. Please refer to Table A4 in the data appendix for details.
- Geopolitical risk and cyber attack remain the most likely to materialise according to respondents.
- The perceived likelihood of inflation risk materialising has decreased significantly since the previous survey with 20% respondents citing this as one of the most likely risks to materialise (-32 percentage points).
- Household/corporate credit risk is now considered likely by 12% of respondents (+8 percentage points).
Data appendix
Aggregate risks to the UK financial system (a) (b)
2019 H1
2019 H2
2021 H2
2022 H1
2022 H2
2023 H1
2023 H2
2024 H1
Probability of a high-impact event in the UK financial system in the short term (c)
Very high
6
15
3
1
14
6
2
0
High
46
57
19
30
48
46
36
24
Medium
35
21
48
46
35
33
32
50
Low
12
6
24
21
3
14
27
23
Very low
1
0
5
1
0
1
4
3
Probability of a high-impact event in the UK financial system in the short term (c)
Very high
9
6
9
9
17
11
7
8
High
42
57
43
37
55
56
50
38
Medium
38
32
40
53
26
28
34
39
Low
10
4
9
1
2
6
9
15
Very low
1
1
0
0
0
0
0
0
Change in the probability over the past six months of a high-impact event in the UK financial system in the short term (d)
Increased
44
68
7
39
83
51
23
35
Unchanged
51
31
57
51
15
35
59
52
Decreased
5
1
36
10
2
14
18
14
Change in the probability over the past six months of a high-impact event in the UK financial system in the medium term (d)
Increased
26
43
22
33
69
42
27
32
Unchanged
73
56
66
61
29
51
70
65
Decreased
1
1
12
6
2
7
4
3
Confidence in the stability of the UK financial system as a whole over the next three years (e)
Complete confidence
1
0
0
1
0
1
2
0
Very confident
30
33
50
44
42
24
29
29
Fairly confident
63
60
45
51
55
69
63
65
Not very confident
6
7
5
3
3
6
7
6
No confidence
0
0
0
0
0
0
0
0
Change in confidence over the past six months (f)
Increased
2
4
22
9
0
7
7
5
Unchanged
77
73
72
81
71
50
80
80
Decreased
21
24
5
10
29
43
13
15
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) Entries are percentages of respondents and may not sum to 100% due to rounding.
- (b) The survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008.
- (c) Respondents were asked what the probability of a high-impact event in the UK financial system was in their view, for both the short and medium term. Since the 2009 H2 survey, short and medium term have been specifically identified as 0–12 months and 1–3 years respectively. These terms were not explicitly defined in earlier surveys.
- (d) Respondents were asked how the probability had changed over the past six months for the short and medium term. Since the 2009 H2 survey, short and medium term have been specifically identified as 0–12 months and 1–3 years respectively. These terms were not explicitly defined in earlier surveys.
- (e) Respondents were asked how much confidence they had in the stability of the UK financial system as a whole over the next three years.
- (f) Respondents were asked how their confidence had changed over the past six months. The question was asked from 2010 H1 onwards.
Sources of risk to the UK financial system (a) (b) (c) (d)
2019 H1
2019 H2
2021 H2
2022 H1
2022 H2
2023 H1
2023 H2
2024 H1
Geopolitical risk
62
58
59
63
72
79
66
85
Cyber attack
60
61
74
79
74
75
80
70
Risks associated with a UK economic downturn
23
23
12
14
20
32
52
44
Inflation risk
6
2
33
63
72
53
57
41
Climate risk
4
15
33
24
23
39
39
36
UK political risk
93
96
40
26
34
28
16
21
Household/corporate credit risk
6
5
7
9
8
10
7
20
Risk of financial institution failure/distress
12
14
7
4
6
6
14
17
Risks around regulation/taxes
19
17
21
9
6
17
11
15
Risk of financial market disruption/dislocation
27
31
31
24
17
13
21
14
Risks associated with an overseas/global economic downturn
38
38
14
6
20
22
16
14
Risks surrounding artificial intelligence
0
0
0
0
0
0
7
14
Risk of infrastructure disruption
5
4
2
0
0
1
7
12
Operational risk
4
6
21
29
20
21
20
12
Other
7
4
21
18
23
19
14
11
Risk of property price falls
14
11
12
13
3
10
11
11
Funding risk
18
18
18
18
18
18
9
8
Risks surrounding monetary and fiscal policy
7
7
7
7
7
7
9
6
Risks around public anger against, or distrust of, financial institutions
0
0
0
3
5
1
0
3
Risk of lack of confidence in ratings, valuations and disclosure
0
1
0
0
0
3
0
3
Sovereign risk
11
0
0
1
2
4
2
3
Risk of tightening in credit conditions (e)
5
0
5
11
17
8
5
3
Pandemic risk
0
0
57
51
31
8
5
3
Risk of loss of confidence in the authorities
4
4
2
1
0
3
2
2
Risk surrounding cryptocurrencies
0
0
0
3
0
0
0
2
Risk surrounding the low interest rate environment
2
12
3
0
0
0
0
0
Number one source of risk to the UK financial system (f)
Geopolitical risk
5
5
2
13
17
28
23
41
Cyber attack
14
6
19
34
17
10
27
21
Risks associated with a UK economic downturn
1
1
2
6
8
14
16
12
Household/corporate credit risk
0
0
0
0
2
3
0
5
Inflation risk
1
0
12
23
38
25
14
5
Operational risk
0
1
0
0
0
1
0
5
UK political risk
69
79
10
1
2
1
0
3
Risk of financial institution failure/distress
0
0
2
1
0
0
2
2
Risk of financial market disruption/dislocation
2
0
3
1
3
0
5
2
Risk of infrastructure disruption
0
0
0
0
0
0
2
2
Risks around regulation/taxes
0
0
3
1
3
1
0
2
Risks associated with an overseas/global economic downturn
2
5
2
0
3
4
0
2
Risks surrounding artificial intelligence
0
0
0
0
0
0
2
2
Funding risk
0
0
0
0
0
0
2
0
Risks around public anger against, or distrust of, financial institutions
0
0
0
0
0
1
0
0
Risk of lack of confidence in ratings, valuations and disclosure
0
0
0
0
0
0
0
0
Risk of loss of confidence in the authorities
0
0
0
0
0
1
0
0
Other
0
0
0
3
0
1
0
0
Risk of property price falls
0
0
0
0
0
3
2
0
Sovereign risk
0
0
0
0
0
1
2
0
Risk of tightening in credit conditions (e)
0
0
2
3
2
1
0
0
Risks surrounding monetary and fiscal policy
1
2
2
1
3
1
4
0
Risk surrounding the low interest rate environment
0
0
0
0
0
0
0
0
Pandemic risk
0
0
38
11
2
0
0
0
Climate risk
1
1
3
0
2
0
0
0
Risk surrounding cryptocurrencies
0
0
0
0
0
0
0
0
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) Respondents were asked which five risks they believed would have the greatest impact on the UK financial system if they were to materialise, in order of potential impact (ie greatest impact first). Answers were provided in a free-text format and were subsequently coded into the above categories; only one category was selected for each answer. Risks cited in previous surveys have been regrouped into the categories used to describe the latest data.
- (b) The survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008.
- (c) Figures are expressed as nearest whole integer, so may appear inconsistent with figures shown in the text of the survey.
- (d) Percentages of respondents citing each risk at least once in their top five, among those citing at least one risk.
- (e) The definition of this risk includes risks associated with a snapback in low rates to more normal levels, as well as risks directly associated with low rates.
- (f) Percentages of respondents citing each risk as their number one risk (ie the risk with the greatest potential impact), among those citing at least one source of risk.
Risks most challenging to manage as a firm (a) (b) (c)
2019 H1
2019 H2
2021 H2
2022 H1
2022 H2
2023 H1
2023 H2
2024 H1
Geopolitical risk
35
32
32
40
48
49
46
70
Cyber attack
52
48
58
65
56
50
70
59
Risks associated with a UK economic downturn
6
14
7
4
13
24
29
18
Household/corporate credit risk
0
3
7
4
5
7
2
16
Inflation risk
1
3
23
46
61
40
41
16
Climate risk
3
4
21
15
13
15
20
16
Risk of infrastructure disruption
4
4
2
0
0
1
7
10
Risks associated with an overseas/global economic downturn
14
21
4
4
6
11
11
10
Risks surrounding artificial intelligence
0
0
0
0
0
0
2
10
Risk of financial institution failure/distress
8
8
5
4
5
0
9
8
Operational risk
0
0
9
18
11
11
11
8
Risk of property price falls
6
1
4
3
0
6
2
8
Other
6
1
16
13
6
13
5
7
Risks around regulation/taxes
11
8
16
6
5
11
4
7
UK political risk
82
75
25
10
14
11
7
7
Risk of financial market disruption/dislocation
10
12
12
10
11
3
5
3
Risks around public anger against, or distrust of, financial institutions
0
0
0
1
3
0
0
3
Risks surrounding monetary and fiscal policy
1
3
4
4
3
3
4
3
Funding risk
15
15
15
15
15
15
9
2
Risk of loss of confidence in the authorities
1
1
0
0
0
3
0
2
Sovereign risk
8
0
0
0
0
3
2
2
Risk of tightening in credit conditions (d)
1
0
4
4
11
3
4
2
Risk of lack of confidence in ratings, valuations and disclosure
0
1
0
0
0
0
0
0
Risk surrounding the low interest rate environment
0
5
0
0
0
0
0
0
Pandemic risk
0
0
40
29
9
4
0
0
Risk surrounding cryptocurrencies
0
0
0
0
0
0
0
0
Cited at least one key risk, but did not cite any risk as challenging to manage (%)
12
13
0
0
0
0
0
0
Number of respondents citing at least one source of risk
81
84
58
70
65
72
56
64
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) After respondents had listed the five risks they believed would have the greatest impact on the UK financial system if they were to materialise, they were asked which three of these risks they would find most challenging to manage as a firm. Answers were provided in a free-text format and were subsequently coded into the above categories; only one category was selected for each answer. Risks cited in previous surveys have been regrouped into the categories used to describe the latest data. Table entries are the percentages of respondents citing each risk at least once in this second question, among those citing at least one source of risk.
- (b) The survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008.
- (c) Figures are expressed as nearest whole integer, so may appear inconsistent with figures shown in the text of the survey.
- (d) The definition of this risk includes risks associated with a snapback in low rates to more normal levels, as well as risks directly associated with low rates.
Risks most probable to materialise (a) (b) (c)
2022 H2
2023 H1
2023 H2
2024 H1
Geopolitical risk
54
54
41
67
Cyber attack
37
38
46
40
Risks associated with a UK economic downturn
20
25
39
37
Inflation risk
63
45
52
20
UK political risk
18
8
9
17
Climate risk
9
11
16
15
Risks surrounding artificial intelligence
0
0
5
12
Household/corporate credit risk
5
8
4
12
Operational risk
6
11
14
10
Risks associated with an overseas economic downturn
18
13
7
10
Risk around regulation/taxes
2
7
4
10
Risk of financial market disruption/dislocation
6
3
11
8
Risk of infrastructure disruption
0
1
4
7
Risk of financial institution failure/distress
2
1
0
7
Risk of property price falls
2
8
9
5
Funding risk
2
6
9
3
Risks surrounding monetary/fiscal policy
5
1
7
3
Other
15
13
4
3
Risk of tightening in credit conditions (d)
17
6
4
2
Pandemic risk
2
0
4
2
Sovereign risk
2
1
2
2
Risk of lack of confidence in ratings, valuations and disclosure
0
0
0
2
Risks around public anger against, or distrust of, financial institutions
5
0
0
0
Risk of loss of confidence in the authorities
0
3
0
0
Risks surrounding low interest rate environment
0
0
0
0
Risks surrounding cryptocurrencies
0
0
0
0
Cited at least one key risk, but did not cite any risk as most likely to materialise (%)
0
0
0
0
Number of respondents citing at least one source of risk
65
72
56
56
Footnotes
- Sources: Bank of England Systemic Risk Surveys and Bank calculations.
- (a) After respondents had listed the five risks they believed would have the greatest impact on the UK financial system if they were to materialise, they were asked which three of these risks was most probable to materialise. This element of the survey was introduced in 2021 H2. Answers were provided in a free-text format and were subsequently coded into the above categories; only one category was selected for each answer. Risks cited in previous surveys have been regrouped into the categories used to describe the latest data. Table entries are the percentages of respondents citing each risk at least once in this second question, among those citing at least one source of risk.
- (b) The survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008.
- (c) Figures are expressed as nearest whole integer, so may appear inconsistent with figures shown in the text of the survey.
- (d) The definition of this risk includes risks associated with a snapback in low rates to more normal levels, as well as risks directly associated with low rates.
The Systemic Risk Survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008. It was published for the first time in November 2011. The survey results complement other sources of information used by the Bank to identify system-wide risks.
Since the 2009 H2 survey, short and medium term have been specifically identified as 0–12 months and 1–3 years respectively. These terms were not explicitly defined in earlier surveys.
These summary categories are adjusted over time in order to better capture current risks cited. Risks cited in previous surveys have been regrouped into the new categories to ensure comparability across survey rounds.
This question was introduced in the 2021 H2 survey.