Europe'sdebt crisiswas picked as the biggest systemic risk facingSouth Korea, followed by household debt problems and the real estate market slump, a survey by the central bank showed Wednesday.

According to the survey by the Bank of Korea (BOK), financial market participants picked the European sovereign debt crisis as the No.1 systemic risk to the country's financial system. The household debt problem and the property market slump ranked second and third respectively, while possible hard-landing of the Chinese economy and the delayed recovery in the U.S. economy came next.

The result was based on responses from 74 financial market participants surveyed by the BOK during the period of between July 5 and 11. The survey was the second of its kind since the central bank launched it in January.

The European debt crisis was believed to be an event that has a high probability to happen within one year, but the crisis in Europe, if takes place, would not have a big impact on the country 's financial system given growing foreign reserves and the implementation of macro-prudential stabilization measures.

The survey, however, showed the household debt problem and the property market slump have high probabilities of happening that would have a big impact on the financial system.

Outstanding household debts stood at 911.4 trillion won (around 800 billion U.S. dollars) as of the end of March, down 0.5 trillion won from three months before. The household debts grew at an annual average rate of 11.7 percent for two years through 2010, much faster than 7.3 percent ofGDPgrowth and 5.7 percent of disposable income increase over the same period.