For financial operators, financial risk refers to the risk of economic losses caused by their business activities. Such risks mainly include interest rate risk, foreign exchange risk and management risk, especially credit risk.
The so-called interest rate risk refers to the possibility of loss caused by the difference between the expected interest rate level and the actual market interest rate level due. The so-called foreign exchange risk refers to the possibility of suffering losses or losing expected returns due to exchange rate changes.
The so-called management risk refers to the possibility of losses caused by poor management of financial institutions or operators. The so-called credit risk, also known as credit risk, refers to the possibility that the debtor can't repay the principal and interest of the debt on time and make the creditor suffer certain economic losses.
Extended data:
Financial risk management process:
The process of financial risk management generally requires three steps: establishing management objectives, conducting risk assessment, and controlling and disposing risks;
(A) the objectives of financial risk management. The ultimate goal of financial risk management is to control the possible financial risks and make a disposal plan on the basis of identifying and measuring risks, so as to prevent and reduce losses and ensure the stable raising of monetary funds and business activities.
(2) Financial risk assessment. Financial risk evaluation refers to the evaluation of financial risk identification, financial risk measurement, selection of various tools to deal with risks and financial risk management countermeasures.
(1) Risk identification. Financial risk identification refers to the systematic classification and comprehensive analysis of potential and obvious risks by using various methods on the basis of field investigation and research.
(2) Risk measurement. It refers to estimating and measuring the possibility of financial risks or the scope and degree of losses, and quantitatively analyzing the possibility and consequences of different degrees of losses.
(3) The choice of financial risk management countermeasures. On the basis of the first two stages, according to the objectives of financial risk management, various financial risk management tools are selected and optimized, and suggestions on financial risk management are put forward. This is the most important stage of financial risk assessment.
Baidu Encyclopedia-Financial Risk