financial risk
any of various types of risk associated with financial transactions, financing or investment
credit crunch
sudden reduction in the general availability of loans or credit or a sudden tightening of the conditions required to obtain a loan from banks
bank run
banking crisis when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future
Downside risk
financial risk associated with losses, actual returns below benchmarks, or results below expectation
specific risk
financial risk that affects a very small number of assets or resources, sometimes referred to as "unsystematic risk"
inherent risk
financial audit
financing risk
type of risk
debt trap
situation in which a debt is difficult or impossible to repay, typically because high interest payments prevent repayment of the principal
liquidity risk
a financial risk that a given financial asset, security or commodity cannot be traded quickly enough in the market without impacting the market price
market risk
Risks arising from movements in market variables
assumption of cover
risk assumed by an insurer to protect the insured
systematic risk
vulnerability to significant events which affect aggregate outcomes such as broad market returns, total economy-wide resource holdings, or aggregate income
basis risk
financial risk associated with imperfect hedging, due to mismatch in asset pricing or expiration dates
counterparty risk
risk that a counterparty will not pay as obligated on a financial contract
credit risk
risk of default on a debt that may arise from a borrower failing to make required payments
Financial contagion
scenario in which financial shocks spread to other financial sectors
model risk
the potential loss an institution may incur, as a consequence of decisions that could be principally based on the output of internal models, due to errors in the development, implementation or use of such models
transformation risk
risk that the discount rate is lower than expected at the time of the conversion of the saved capital into an annuity
tail risk
risk of rare events, typically defined as more than 3 standard deviations from expected values, far above the risk of a normal distribution
financial crisis
situation in which financial assets suddenly lose a large part of their nominal value
longevity risk
any potential risk for pension funds and insurance companies attached to the increasing life expectancy of pensioners and policy holders
risk of ruin
a concept in gambling, insurance, and finance relating to the likelihood of losing all investment capital
uncompensated risk
in investments, level of additional risk
valuation risk
financial risk that an asset is overvalued and is worth less than expected when it matures or is sold
insolvency
state of being unable to pay the debts at maturity by a person or company
write-off
reduction in recognized value of an entity
upside risk
uncertain possibility of gain in investment
endogenous risk
type of financial risk that is created by the interaction of market participants, rather than by external shocks
systemic risk
risk of disruption in the financial system with the potential to have serious negative consequences for the financial system and the real economy, as opposed to specific risk associated with any one individual entity, group or component of a system
cost overrun
unexpected incurred costs in excess of budgeted amounts
active risk
financial risk management measure
policy uncertainty
a class of economic risk where the future path of government policy is uncertain, raising risk premium
macro risk
risk that is associated with macroeconomic, political or environmental factors