Difference between systematic and systemic risks

Systemic risk is the risk that a relatively narrow shock, such as the failure of a particular company, will propagate quickly and broadly throughout the financial system and to the real economy. It is the opposite of systematic risk, which measures the extent to which movement of a broad market or economic factor imparts risk to a narrow entity such as an individual company. 

- Kinlaw, Kritzman, and Turkington "Toward Determining Systemic Importance"

I really like these simple definitions of systemic and systematic risk. It is good to review these definitions when we are faced with some possible systemic and systematic risks. I think we may say that a China devaluation may turn into a systematic risk. We cannot say for sure until after it starts to affect global markets, but this somewhat isolated event may have spill-over to all asset classes. A decline in the China stock market could be viewed as a systematic risk that will affect many individual stocks.  It could turn into a systemic risk if starts to carry across multiple asset classes in unexpected ways.

Could these definitions be splitting hairs? I think the Greece crisis was systemic risk and the potential bankruptcy of Puerto Rico could be a systemic risk. The Fed raising rates represents more of a systematic risk. Systematic risks are those that we can be clearly measured. We can find a "beta" for the sensitivity to a rate increase or a stock market decrease. A systemic risk is harder to measure. There is no beta that is measurable for these more one-off events. We may be able to measure linkages across markets and sectors, but whether a shocks will take hold cannot be easily determined. This is what makes systematic risks so nasty and why there is a need to deeply think about "tail risk", hedging, and diversification.