Market risk:
It arises as a result of the movement of prices of financial instruments of this type of risk. And it can be classified as market risk, risks and non-directional - directional risk. The risk arises from the trend in the movement of stock prices, interest rates and others. The risk of non-directional on the other side may be a risk of volatility.
Credit risk:
This type of risk arises when a failure to fulfill its obligations with respect to the opposing parties. And it can be classified as credit risk to sovereign risk and settlement risk. Usually they arise because of difficult change policies sovereign risk. Settlement risk, on the other hand, arises when one of the parties and payment, while the other party to fulfill the obligations failure.
Liquidity risk:
This type of risk is due to the inability to execute transactions. And liquidity risk can be categorized in asset liquidity risk and funding liquidity risk. Liquidity risks of assets, either due to lack of buyers or sellers enough against the sale and purchase orders respectively.
Operational risk:
This type of risk is due to operational failures such as poor management or technical failures. It is possible rating of operational risk in the risk of fraud and Risk Model. The risk of fraud due to the lack of controls and risk is the application form is incorrect arises.
Legal risks:
This type of financial risks arising from legal restrictions, such demands. Whenever the company has to meet financial loses legal action, is the legal risk.
To learn more about the risks and a thorough understanding of the types of financial risks, you can explore the online training courses we have in financial risk management. Prince offers both romantic line training and classrooms in the Financial Risk Manager (FRM) Part 1 examination.