What are the causes of financial risks?

The causes of financial risks mainly come from financial markets; Counterparty; And their own employees, processes and systems; Finally, different risks overlap each other.

Affected by the price changes of various factors in the financial market, market risks and liquidity risks have emerged.

Affected by the counterparty's performance and the change of the counterparty's own credit level, credit risks are generated, including default risk, credit spread risk and downgrade risk.

Affected by their own staff, process and system errors, resulting in business risks.

There are also systemic financial risks arising from the superposition of different risks. Such as credit risk caused by market risk, or market risk caused by credit risk, which eventually leads to systemic risk.