(1) Credit risk, also known as default risk, refers to the possibility that creditors will suffer losses due to the difficulty or unwillingness of counterparties to repay debts. Bank credit risk mainly refers to the risk of bank loan loss caused by the debtor's failure to repay the loan in full as scheduled. Credit business is the traditional and main business of banks. Banks are the credit center of society and the concentration of credit risks. Therefore, under the condition of modern credit economy, the credit risk faced by banks is a prominent risk, and the losses brought by credit risk to banks are also huge.
(2) Market risk refers to the risk that the on-balance-sheet and off-balance-sheet business of a bank will suffer losses due to adverse changes in market prices (interest rate, exchange rate, stock price and commodity price). Market risk exists in the transactions and non-transactions of banks. The Basel Committee defines market risk as the risk of loss of positions inside and outside the balance sheet due to changes in market prices. According to this requirement, market risks include: the risks involved in various financial instruments and stocks related to interest rates in a trading account; Bank-wide foreign exchange risk and commodity risk. Specifically, market risk is mainly composed of interest rate risk, exchange rate risk, stock price risk and commodity price risk, which refer to the risks caused by adverse changes in interest rate, exchange rate, stock price and commodity price respectively.
(3) According to the types of risks, operational risks can be divided into four categories, namely, internal operational processes, human factors, institutional factors and external events. According to the risk factors, it can be divided into seven types, including: internal fraud; External fraud; Safety issues in employee activities and workplaces; Security issues of customers, products and business activities; The physical assets maintained by the bank are damaged; Business interruption and system error; Administration, delivery and process management, etc.
(4) Liquidity risk is one of the main risks faced by China's commercial banks. With the increasingly open financial market, once the liquidity risk turns into a liquidity crisis, it will cause irreversible losses. Compared with credit risk, market risk and operational risk, the causes of liquidity risk are more complex and extensive, and it is usually regarded as a comprehensive risk.