Financial risk

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As financial risks are risks of a business entity called that originated in the financial sector and have a direct impact on the income statement impact. Financial risks are particularly assumed by credit institutions because financial transactions represent a core business of banking .


Economic subjects include households , companies and the state . Financial risks can arise in all of them, which can endanger their financial stability. Private households can recognize and eliminate possible financial risks through private financial planning within the framework of the existing general financial education . In the company, the financial risks belong to the special entrepreneurial risks , because they arise directly from the operational production process, but can also result from non-operational risks. Financial risks there form part of the economic risks that can arise from entrepreneurial activity. Their precise classification as a type of risk can be found in the article on the risk report . As with all operational risks, financial risk can be countered by means of suitable risk management .

For rating agencies, there are two spheres of risk in companies, namely business and financial risk. The latter is made up of financial policy , profitability , capital structure , cash flow generation and financial flexibility.


These are financial risks

These types of financial risk can also be broken down into direct and indirect financial risks . The market risk, the risks from derivatives , securities and foreign exchange belong to the direct financial risks . Indirect financial risks include default, liquidity and credit risk .

Risk of success

Market price risk, counterparty default risk and liquidity risk are among the risks to success or earnings, as they have a negative effect on the profit of a company or even increase the loss if they occur. The refinancing risk may affect as income risk if the costs for the procurement of liquidity for a company rise. Mostly, however, withdrawals are made at the risk of insolvency , and the refinancing risk is then not counted among the earnings risks.

Individual evidence

  1. Simon Schiffel, Implicit Probabilities of Default of Corporate Bonds , 2009, p. 49 f.
  2. Regulation (EU) No. 648/2012 of July 4, 2012, ABl. L 201/1
  3. Thorsten Schmitz / Michael Wehrheim, Risk Management: Basics - Theory - Practice , 2006, p. 40 f.