Systemic Risk Survey Results - 2025 H2

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 2025 H2 survey, which was conducted between 28 July and 27 August 2025.

59 firms participated in the 2025 H2 survey, representing a 67% response rate.

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 respondents remain confident in the stability of the UK financial system, reporting a higher level of confidence than in 2025 H1.

• 95% of respondents judge themselves as being very confident (37%, +3 percentage points since the 2025 H1 survey), or fairly confident (58%, +5 percentage points).
• 5% of respondents judge themselves as being not very confident (-8 percentage points).
• No respondents report being completely confident (unchanged since the 2025 H1 survey).

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, 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 at a similar level compared to the previous survey, but higher over the medium term.

Over the short term (0–12 months):

• No respondents consider the likelihood of a high-impact event to be very high (-2 percentage points since the 2025 H1 survey).
• 19% of respondents consider the likelihood of a high-impact event to be high (-3 percentage points).
• 51% of respondents consider the likelihood of a high-impact event to be medium (+9 percentage points).
• 31% of respondents consider the likelihood of a high-impact event to be low (29%, -2 percentage points) or very low (2%, -2 percentage points).

Over the medium term (1–3 years):

• 42% of respondents consider the likelihood of a high-impact event to be high (+11 percentage points).
• 3% of respondents consider the likelihood of a high-impact event to be very high (-2 percentage points).
• 47% of respondents consider the likelihood of a high-impact event to be medium (-5 percentage points).
• No respondents consider the likelihood of a high-impact event to be very low (unchanged since the 2025 H1 survey), and 7% consider the likelihood to be low (-4 percentage points).

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 2025 H2 survey as one of their top five risks (Chart 4):

1. Cyberattack (cited by 86% of respondents, +14 percentage points since the 2025 H1 survey).

2. Geopolitical risk (85%, -3 percentage points).

3. Risks associated with a UK economic downturn (56%, -6 percentage points).

4. Risk of financial market disruption/dislocation (46%, +13 percentage points).

5=. Operational risk (36%, +3 percentage points).

5=. Risks associated with an overseas/global economic downturn (36%, +16 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 (36%, -6 percentage points).

2. Cyberattack (20%, +2 percentage points).

3. Risks associated with a UK economic downturn (8%, -1 percentage point).

4. Sovereign risk (7%, +5 percentage points).

5=. Funding risk (5%, +1 percentage point).

5=. Operational risk (5%, -6 percentage points).

5=. Risks associated with an overseas/global economic downturn (5%, +1 percentage point).

Cyberattack and geopolitical risk remain the two most frequently cited sources of risks that would have the greatest impact on UK the financial system should they materialise, with the proportion of participants citing cyberattack increasing to its highest level recorded in the survey.

There has been a sharp rise in the number of respondents citing risk of financial market disruption/dislocation and risks associated with an overseas/global economic downturn, while the share citing inflation risks has fallen further.

• The three most frequently cited risks – cyberattack (86%), geopolitical risk (85%), and risks associated with a UK economic downturn (56%) – remain the most frequently cited since the 2024 H1 survey.
• The next most cited risks continued to be those associated with financial market disruption/dislocation (46%), though no respondents cite it as their ‘number one’ risk. Financial market disruption/dislocation has continually grown since the 2024 H1 survey (46%, +14 percentage points since the 2024 H1 survey), with respondents noting the risk of a reduction in market liquidity and dislocation in securities markets.
• The share of participants citing risks associated with an overseas/global economic downturn rose in the latest survey (36%, +16 percentage points).
• Beyond the top five risks, there was a significant reduction in the share of respondents citing inflation risk (7%, -10 percentage points since the 2025 H1 survey).

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.

The most cited risks are shown below (Chart 6):

1. Cyberattack (75% of respondents, +13 percentage points since the 2025 H1 survey).

2. Geopolitical risk (68%, +1 percentage point).

3. Risks associated with a UK economic downturn (27%, -7 percentage points).

4. Operational risk (20%, -5 percentage points).

5=. Risk of financial market disruption/dislocation (14%, +3 percentage points).

5=. Risks associated with an overseas/global economic downturn (14%, +3 percentage points).

Cyberattack and geopolitical risk are still considered to be most challenging risks to manage.

• Cyberattack (75%) and geopolitical risk (68%) are still considered the most challenging to manage by respondents, with the proportion of those citing cyberattack increasing to its highest level recorded in the survey.
• Although there has been a slight decrease in the proportion of participants citing risks associated with a UK economic downturn and operational risk since the 2025 H1 survey, they continue to be considered one of the most challenging to manage.
• The proportion of respondents citing inflation risk has decreased, by 8 percentage points.
• Risk of financial market disruption/dislocation and risks associated with an overseas/global economic downturn have both increased by 3 percentage points.

Key risks most likely to materialise

Respondents were asked to rank which of the five risks they thought would be the most probable to materialise.^{footnote [4]}

The most cited risks are shown below (Chart 7):

1. Geopolitical risk (71% of respondents, -9 percentage points since the 2025 H1 survey).

2. Cyberattack (56%, +12 percentage points).

3. Risks associated with a UK economic downturn (41%, -8 percentage points).

4. Risks associated with an overseas/global economic downturn (25%, +16 percentage points).

• Geopolitical risk remains the most likely risk to materialise according to respondents.
• There has been an increase in respondents citing cyberattack since the 2025 H1 survey, and it has returned to being the second most likely risk to materialise.
• The share of respondents citing risks associated with an overseas/global economic downturn has risen sharply, by 16 percentage points.
• Outside of the top four risks above, inflation risk has continued to decrease and is now at its lowest level recorded in the survey.