Risks faced by commercial banks

1. Credit risk: the risk that the counterparty cannot perform the contract; 2. Market risk: refers to the risk that the bank's on-balance sheet and off-balance sheet positions suffer losses due to changes in market prices. 3. Interest rate risk: refers to the risk faced by the financial situation of the bank when the interest rate fluctuates unfavorably. 4. Liquidity risk: refers to the situation that a bank can't provide financing for the reduction of liabilities or the increase of assets, that is, when the bank's liquidity is insufficient, it can't quickly increase liabilities or realize assets at a reasonable cost to obtain sufficient funds, thus affecting its profitability; 5. Operational risk: mainly lies in the failure of internal control and corporate governance mechanism; 6. Legal risk: including the risk of asset value reduction or debt increase due to imperfect and incorrect legal opinions and documents; 7. Reputation risk: This risk stems from operational errors, violation of relevant laws and regulations and other issues. Click View → More FRM Registration and Certification Questions