What are the financial risks of bank recruitment written test?

Financial risks mainly include credit risk, market risk, operational risk, liquidity risk, national risk, reputation risk, legal risk and strategic risk.

The bank's autumn move and spring move pay more attention to the proposition of financial risk. When candidates encounter various "risks" in the topic, if they can't accurately judge the types of risks, they need to accurately distinguish the meaning of each risk.

I. Credit risk

Credit risk, also known as default risk, refers to the possibility that the debtor or counterparty fails to perform the obligations stipulated in the contract or the credit quality changes, thus bringing losses to the bank. For most banks, credit risk exists in almost all their businesses. Credit risk is the most complicated risk category of banks and the most important risk that banks face.

Second, market risk.

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 (including interest rates, exchange rates, stock prices and commodity prices). Market risks include interest rate risk, exchange rate risk, stock price risk and commodity price risk.

Third, operational risk.

Operational risk refers to the risk of loss caused by imperfect or problematic internal procedures, personnel and systems or external events. Operational risk can be divided into four types of risks caused by people, systems, processes and external events, and can be divided into seven forms: internal fraud, external fraud, problems of employee employment practices and workplace safety, problems of customers, products and business practices, damage to physical assets, business interruption and system failure, and imperfections in execution, delivery and process management. Operational risk exists in all aspects of banking business and management, and it is convertible, that is, it can be transformed into other risks such as market risk and credit risk.

Four. liquidity risk

Liquidity risk refers to the possibility that a bank cannot meet its customers' liquidity needs in time without increasing the cost or losing the value of assets, thus causing losses. Liquidity risk includes asset liquidity risk and liability liquidity risk. Asset liquidity risk refers to the possibility that assets cannot be fully recovered as scheduled, and financing needs such as repayment of due liabilities and new reasonable loans cannot be met, thus bringing losses to banks. Debt liquidity risk refers to the possibility that funds raised by banks in the past, especially deposit funds, will fluctuate irregularly due to changes in internal and external factors, be impacted and cause related losses.

Verb (abbreviation for verb) country risk

National risk refers to the fact that economic subjects may suffer losses due to economic, political and social changes in other countries in international economic and financial exchanges with non-residents. Country risk is usually caused by the behavior of the country where the debtor is located, and creditors can't control it. National risks can be divided into political risks, social risks and economic risks.

National risk has two characteristics: first, national risk occurs in international economic and financial activities, and there is no national risk in economic and financial activities within the same country; Second, in international economic and financial activities, no matter the government, banks, enterprises or individuals, they may all suffer losses caused by national risks.

Reputation risk of intransitive verbs

Reputation risk refers to the risk that intangible assets of banks may suffer losses due to negative results caused by unexpected events, bank policy adjustment, market performance or daily business activities.

Seven. legal risk

Legal risk refers to the risk that a bank may not be able to perform the contract, have disputes/lawsuits or other legal disputes in its daily business activities, which may cause economic losses to the bank.

Eight. Strategic risk

Strategic risk refers to the potential risk that improper future development planning and strategic decision may threaten future development in the process of systematic operation of banks in pursuit of short-term commercial goals and long-term development goals. Mainly from four aspects: the overall compatibility of bank strategic objectives; Business strategy to achieve these goals; Resources for these objectives; The quality of the strategy implementation process.

The above is all the answers to "What are the financial risks of the written bank recruitment test".