Definition ∞ Systemic risk controls are preventative measures and regulatory frameworks implemented to mitigate threats that could destabilize an entire financial system. These controls aim to prevent the failure of one institution or market segment from causing a cascading collapse across the broader economy. They include capital requirements, stress tests, and robust oversight mechanisms. Their purpose is to maintain financial stability.
Context ∞ In the context of decentralized finance (DeFi), the implementation of systemic risk controls is a growing area of focus for regulators and protocol developers. News reports often discuss the need for mechanisms to protect against contagion risks within interconnected DeFi protocols. These controls are crucial for the long-term viability and integration of decentralized financial systems into the global economy.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
