The definition of risk management is that when an enterprise is faced with market opening, cancellation of laws and regulations and product innovation, the fluctuation degree of change will increase, thus increasing the risk of operation. Good risk management helps to reduce the probability of decision-making mistakes, avoid the possibility of losses, and relatively increase the added value of the enterprise itself.
The types of risks include:
1. Market risk: the risk that fluctuations in market prices may cause losses to the operation or investment of enterprises, such as the impact of changes in interest rates, exchange rates and stock prices on relevant profits and losses.
2. Credit risk: the risk that the counterparty cannot pay the money or has no recourse because of malicious bankruptcy.
3. Liquidity risk: risks that affect the capital allocation ability of enterprises, such as debt management, asset liquidity and emergency liquidity.
4. Operational risk: risks brought to enterprises by poor operating system and negligence in operation, such as poor or contradictory process design, omissions in operation and implementation, and failure to implement internal control.
5. Legal risks: the risks that the completeness and validity of the contract may cause to the enterprise, such as the legality of the contracted business, the recognition of foreign language contracts, foreign laws and regulations, etc.
6. Accounting risks: risks that accounting treatment and taxation may have on the profits and losses of enterprises, such as the appropriateness and legality of accounting treatment, the integrity of tax consultation and treatment, etc.
7. Information risk: risks brought to enterprises by improper security control, operation and backup of information systems, such as system failure, collapse, data destruction, security protection or computer virus prevention.
Strategic risk: the risk that an enterprise chooses a niche market or improper core products in a competitive environment.
Risk management principles:
First, emphasize management beforehand.
Second, quantify the evidence to measure the degree of risk.
Third, presuppose the worst.
Fourth, simulation evaluation.
Fifth, flexible adjustment.
For the risk management policy, the business strategy or policy, business plan, internal control and audit system should be clearly defined, the risk position limit should be established and reported to the board of directors for approval, and the implementation performance should be evaluated and reviewed and revised in time.
Risk management refers to the decision-making and action process of risk identification, risk estimation, risk assessment and risk control to reduce the negative impact of risks. With the social development and scientific and technological progress, there are more and more risk factors in real life. Both enterprises and families are increasingly aware of the necessity and urgency of risk management. People come up with various ways to deal with risks. However, no matter what method is adopted, a general principle of risk management is: to obtain the greatest protection at the lowest cost.
There are four ways to deal with pure risk: avoiding risk, preventing risk, maintaining risk and transferring risk.
(A) to avoid risks
Risk avoidance refers to the possibility of actively avoiding losses. It is suitable for dealing with risks with high loss probability and degree, such as not swimming when considering the danger of drowning. Although avoiding risks can fundamentally eliminate hidden dangers, this method obviously has great limitations. Its limitation is that not all risks can or should be avoided. For example, accidental personal injury, no matter how careful, this risk can never be completely eliminated. Another example is refusing to take the bus for fear of accidents. Although the risk of accidents can be completely avoided, it will bring great inconvenience to daily life and is actually not feasible.
(2) Risk prevention
Risk prevention refers to taking preventive measures to reduce the possibility and degree of loss. Building water conservancy projects and building shelterbelts are typical examples. Risk prevention involves the comparison between current cost and potential loss: if the potential loss is far greater than the cost of taking preventive measures, risk prevention measures should be taken. Take the construction of a dam, although the construction cost is high. However, considering the great disaster that floods will cause, this is extremely necessary.
(c) Retention of risk
Self-retention risk refers to taking risks on your own initiative irrationally or rationally. "Irrationality" refers to exposure to risks due to the existence of fluky psychology or underestimation of potential losses; "Rationality" means that after correct analysis, it is considered that the potential losses are within the tolerable range, and it is more economical to bear all or part of the risks by yourself than to buy insurance. Therefore, when making a "rational" choice, the retained risk is generally suitable for dealing with risks with low probability of occurrence and low degree of loss.
(D) Transfer risks
Transferring risks refers to transferring all or part of the risks you face to another party through some arrangement. Obtaining guarantee by transferring risk is the most widely used and effective risk management method. Insurance is one of the risk management methods to transfer risks.
Personal and family risk management:
Individuals and families have to bear all kinds of risks, and the contents of risks are slightly different at each stage of the family life cycle. In order to effectively manage risks, we must understand our risk preferences and the risk tolerance of our families.
Personal and family risk management process:
Step 1: Identify and determine risks.
First of all, we must recognize the risk and understand its seriousness. The following is a brief list of risks that families or individuals may face:
Family risk types
Possible loss of type life cycle/project risk
The whole stage of life and health
Before retirement (the first five stages)
From marriage to retirement (four intermediate stages)
Child disability
Physical disability
die
The extra cost of disability, family burden
Reduced or no income
No income
extra costs
Real estate rental house
Own house
Family car
Other material loss or damage
Loss or damage
Theft, loss, damage
Theft, loss, damage and other rental expenses
Repair or renewal, temporary accommodation
Repair or renewal, temporary rental fee
Repair or update
Irresponsible behavior
Property liability to second and third parties
Liability to the third party, loss of the other party (compensation fee)
Third Party Loss (Compensation)
Career/investment work
operate
Investment unemployment
Have a deficit
Failure has no income.
No profit or capital loss
There is no gain and no loss of principal.
The above table only lists the main risks that may occur in ordinary families, and it is impossible to cover all risks. There may be some special risks for different families, such as lawsuits and economic disputes.
Step 2: Risk assessment
Risk assessment uses two criteria: the size of potential loss and the probability of risk. The choice of risk tolerance can have several results: unbearable, tolerable and unimportant. If a risk significantly affects the family's living standard and is unbearable (or unsupported), no matter how likely it is, it is a relatively large loss; If the loss is small, even if the probability is high, it can be tolerated. If the probability is low, it is not important. Of course, for different families, the size of the assessment loss is different.
The following table gives a simple list of risk assessments.
Probability of occurrence of risk assessment
Losses are high and low.
Unbearable. insufferable
It doesn't matter if it's small enough to bear.
Unbearable risks are something you should try to control.
Step 3: Risk control
The methods to control risks are:
The first is hedging. When faced with alternatives, please try to avoid risky behavior, such as not mentioning dangerous activities, taking fewer trains and flying less.
The second is to spread risks. If family members do not refer to the same dangerous activities, avoid simultaneous casualties; Husband and wife are not in the same unit, which avoids the risk of unemployment at the same time.
The third is to prevent and reduce the frequency of risks.
Step 4: Deal with risks through insurance.
For families, avoiding risks through insurance is to find partners who share risks.
Step 5: Monitor risks.
Pay attention to risk issues on a regular basis. If the age group changes, you need to reconsider the risk management control plan.
Enterprise risk management:
For a modern enterprise with the goal of sustainable development, the market competition is becoming more and more fierce, and it goes without saying that its business activities can not achieve the expected results or even go bankrupt. The risks are different. Common risks such as credit risk, liquidity risk, exchange rate risk, stock market risk, bankruptcy risk, etc. Different enterprises pay attention to different risks. However, for any enterprise, enterprise risk management is the core content of business process. It is a systematic method and process that enables enterprises to control the influence of market uncertainty and change within an acceptable range in the process of realizing future strategic goals.
Specifically, risk management enables enterprises to achieve their strategic goals by understanding the situation of enterprises and markets, identifying risks, analyzing risks, evaluating risks, designing and implementing risk management solutions, and constantly monitoring the risk management process.
Since the end of 1990s, enterprise comprehensive risk management has complied with the world economic trend, become the operating standard of enterprise risk management, and occupied the central stage of enterprise management. The specific reasons are various:
1) The changes in the world market are surging, and the number and complexity of risks are increasing day by day. As pointed out by some surveys, a typical large enterprise in today's market will face more than 65,438+0,000 risks.
2 )
The old risk management paradigm is not enough as a reference to solve the risks faced by today's representative enterprises. A survey report pointed out that among all risks, non-traditional risks are ranked first by enterprise managers, and such risks cannot be effectively managed only by traditional risk management means.
3) The comprehensiveness of business operation mode is increasingly prominent. The mixed operation of insurance and finance has become a trend; The world financial derivatives market is developing rapidly.
4 )
The development of new technology accelerates the flow of capital and information, improves the occurrence level of enterprise risks, and also promotes the implementation of new risk strategies. In particular, the rapid development of information technology in the 1990s made it possible to effectively monitor many risks.
5) Shareholders' interest in stable growth is also an encouragement for good risk management operation. Investors try to avoid long-term capital management companies (LTCM) and Enron (
Enron) and other companies go bankrupt. Research shows that the market has given 10% to companies that have been growing steadily for many years.
Or a higher market premium. For company leaders, excellent risk management has become an important value requirement.
6 )
As more and more governments and international organizations in the world require listed companies to report risk management, the pressure of supervision is increasing. Recently, laws related to risk management have appeared in the United States, Britain, Germany, Australia, Japan and France.
7) Since the beginning of the new century, some catastrophic events, such as the collapse of the American securities market and the Enron scandal, especially the "9. 1 1" in the United States.
The incident turned people's attention to the field of risk management. In "9. 1 1"
After the incident, the soaring insurance market and the sluggish securities market forced corporate executives around the world to seek better risk management solutions to adapt to the business environment.
The necessity of risk management
In recent ten years, the fluctuation of currency exchange rate in major industrial countries is characterized by increasing amplitude and frequency, and there is no synchronization and linkage, which will inevitably increase the risk of holding foreign exchange in China's export-oriented enterprises. Effectively avoiding the risk of exchange rate fluctuations has become an unavoidable topic for export-oriented enterprises.
There are many conventional operation methods to avoid the risk of exchange rate fluctuation, such as swap trading and option trading. The author thinks that it is also an operational idea to choose the strongest currency and avoid the weakest currency according to the historical trend of various currencies and the analysis of related indexes.
The dollar is the most important currency in the world, and the most important exchange rate relationship in the world is the exchange rate between the currencies of major industrial countries and the dollar, followed by the exchange rate between the currencies of major industrial countries (also called cross exchange rate). An important indicator to measure the strength of the US dollar exchange rate is the US dollar index. The dollar index we usually see is mainly the index of the dollar against the currencies of major industrial countries. The subject matter is the currencies of six countries (regions), of which the euro is the most important currency, accounting for 57.6% of the total, which has the greatest influence on the strength of the US dollar index. The weight of the dollar index is mainly concentrated in the euro, the yen (accounting for 13.6%) and the pound (accounting for 165438). (Figure 1)
Another important exchange rate relationship in the international financial market is the cross exchange rate. Cross exchange rate refers to the exchange rate of one non-US dollar currency to another non-US dollar currency in the international financial market, that is, the exchange rate between two non-US dollar currencies. At present, the most important cross exchange rates in the world are euro/yen, euro/pound, pound/yen. In recent years, the international economy has become increasingly multipolar, which is accompanied by the prominent position of the cross exchange rate and the upward trend in a step-by-step manner.
The author's basic analysis idea is: based on the trend analysis of the US dollar index, supplemented by the trend analysis of major cross exchange rates, when the analysis shows that the US dollar index is in a strong position and will continue to be strong, through the comparative analysis of the operating trends of various cross exchange rates, find out the weakest currency to short the currency; When the analysis shows that the US dollar index is weak and will continue to be weak, we can find out the strongest currency by comparing and analyzing the running trends of various cross exchange rates.
As shown in the figure 1: The US dollar index has been strong since 1995, and it didn't weaken completely until April 2002, and there is still no obvious sign of strengthening again. At that time (65438+May-June, 0995), the cross exchange rate showed that the euro (that is, the German mark at that time, explained by continuous data, the same below) had begun to strengthen against the Japanese yen, and the pound also showed the characteristics of long-term strength against the Japanese yen. Therefore, the trading strategy at that time should be to short the yen and hold US dollar cash at the same time (Figures 2 and 3).
Later, the market results were as follows: the yen continued to fall for more than three years, and it did not begin to strengthen until 1998 10, during which the decline was over 80%; In the months of 1998 and 10, the euro sent a long-term bearish signal against the yen (see Figure 2), and at this time, the US dollar index has just completed a partial correction and stabilized again, and its long-term strong characteristics have not changed significantly (see Figure 1), so the trading strategy at this time should be to short the euro while holding US dollar cash; As a result, the euro continued to fall for more than two years, and it didn't stop falling until 2000, during which it fell more than 30% against many foreign currencies (Figure 4).
After 2000, the dollar began to show signs of stagflation (see figure 1). During the same period, the cross-exchange rate showed that the euro began to strengthen against the yen (see figure 2), and the pound also began to strengthen. The euro was neck and neck with the pound, but the Swiss franc was obviously brave against the euro (figure omitted). It can be concluded that: 1 The overall strength of the dollar has not changed, and it should still be dominated by holding dollars; 2. Among the cross exchange rates, Swiss franc is the strongest and Japanese yen is the weakest. You can appropriately bless the Swiss franc bulls and short the yen. Therefore, the U.S. dollar index did not begin to weaken in an all-round way until April 2002 (see figure 1), the strength of the Swiss franc continued until now (figure 5), and the weakness of the Japanese yen against the U.S. dollar continued until April 2002, but the weakness of the cross exchange rate has not changed significantly so far (see figure 2).
The historical trend of the above five varieties shows that: 1. The fluctuation of exchange rate has obvious trend characteristics, and the trend is stable and long-term. For example, the US dollar index maintained an upward trend for seven years before 2002, and the Swiss franc continued its upward trend against the US dollar for three years since it regained its strength at 200 1. Second, the continuous range of exchange rate fluctuations in the past decade is extremely large. For example, in the past three years, the exchange rate of the euro against the US dollar has risen continuously by more than 55%, and the Swiss franc has also risen by as much as 40% against the US dollar (if the US dollar is reversed, it is close to 60%). Third, due to the influence of cross exchange rate, the exchange rate changes between various currencies and the US dollar are asynchronous. For example, during 2000-2002, USD/JPY showed a continuous upward trend. At that time, as the Euro/Yen had begun to strengthen and was supported by it, the Euro/Dollar fluctuated in a range and the exchange rate did not change much. Fourth, the strong will always be strong and the weak will always be weak. The most typical example is the Swiss franc. Since the outbreak of the US dollar crisis in the early 1970s, the Swiss franc has maintained an obvious strength. Although there have been several big callbacks, they can finally regain their upward trend and hit a new high after each callback. This time, taking advantage of the weakness of the US dollar, it is likely to break through the historical high of 1. 1 120 in one fell swoop.
To sum up, enterprises should pay attention to the following points when engaging in hedging transactions aimed at avoiding the risk of long-term exchange rate fluctuations: 1, firmly believe in the trend and long-term nature of exchange rate fluctuations, and do not change the direction of holding money casually; 2. Don't blindly speculate on the end point of exchange rate fluctuations, and finally decide how to adjust the causal strategy after the trend reversal is fully confirmed; 3. We should adhere to the trading principle of strengthening and avoiding weakness, and don't expect the weak currency to suddenly strengthen, let alone excessively hold the weak currency based on this imagination.
The foreign exchange market is one of the most important capital investment markets in the world. If we can grasp it properly and operate it properly, it is very likely that the gains from it will far exceed the traditional foreign trade export profits.