6 Major risks faced by financial institutions are:
- Credit Risk: risk that a bank borrower or
counterparty will fail to meet its obligations in accordance with
agreed terms.
- Market Risk: risk arised due to market factors
like interest rates, credit spreads, foreign-exchange rates
etc.
- Operational risk: risk of loss resulting from
inadequate or failed internal processes, people and systems.
- Liquidity risk: lack of marketability of an
investment.
- Reputational risk: risk of possible loss of
the organisation’s reputational capital (which is an intangible
asset).
- Business risk: risk that a company will have
lower than anticipated profits (or infact may be loss)
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