What is the functional risk management and control of financial markets?

What is the functional risk management and control of financial markets?

Financial market refers to monetary fund lending, foreign exchange trading, securities trading, bond and stock issuance, and gold and other precious metal trading places. The combination of direct financial market and indirect financial market constitutes the whole financial market.

The first element of constructing the financial market business risk management system is to have a clear risk preference orientation. The second element is to establish a governance structure with clear powers and responsibilities. The third is process management. The fourth pillar is risk management technology. The fifth aspect is to establish a risk culture that adapts to financial market business.

What are the financial market risks?

Financial market risk refers to the risk that affects all assets and cannot be eliminated through asset portfolio, which is caused by risk factors that affect the whole market.

Financial market risk, also known as systemic risk, is also known as non-dispersible risk. Its main features are:

1. is caused by the same factor.

Economic aspects such as interest rate, current exchange rate, inflation, macroeconomic policy and monetary policy, energy crisis, economic cycle, etc. Political aspects such as regime change and war conflict. Social aspects such as system reform and ownership reform.

It affects all stock holders in the market, but some stocks are more sensitive than others.

Such as basic industries and raw materials industries, the systemic risk of their stocks may be higher.

Diversified investment cannot be eliminated.

Because systemic risk is beyond the control of a single enterprise or industry, and it is caused by some factors in the social, economic and political system, which affects the operation of most enterprises, it is useless for investors to choose a portfolio anyway.

What is the functional risk management and control of financial markets? To sum up, the functional risk control of financial markets mainly starts from five aspects, and you can also refer to these five aspects for risk control and adjustment. What you should pay attention to is that the financial market can bring you gains and losses, and its opportunities and risks coexist, so you should be cautious in investing.