What does financial market risk control mean?

Risk control means risk control, which is one of the most commonly used terms in the financial industry. Risk control in financial markets is mainly manifested in credit risk assessment, that is, loan or card business.

1. Financial enterprises conduct risk assessment on users' application materials and comprehensive qualifications, and will issue rejection notices to users with high default risk. At the same time, when users use various services provided by financial enterprises, they will also be supervised by staff or systems in enterprises. In case of transaction risk or default risk, user accounts may be frozen.

2. The credit industry generally includes fraud risk and credit risk. Fraud refers to deliberately defrauding loans without repayment intention. Credit risk refers to the inability to repay on time due to various reasons, and the willingness to repay but the temporary inability to repay. Specifically, there will be indicators such as pass rate, overdue rate and bad debt rate to measure.

3. As managers, they will take various measures to reduce the possibility of risk events, or control the possible losses within a certain range to avoid unbearable losses when risk events occur.

Four ways to avoid risks:

First, avoid risks.

1. Risk aversion means that investors consciously give up risky behavior and completely avoid specific loss risks.

2. Simple risk aversion is one of the most negative risk management methods, because investors often give up their potential target income while giving up their risk-taking behavior.

Second, the loss control

1, loss control is not to give up risk, but to make plans and take measures to reduce the possibility of loss or actual loss.

2. The stages of control include three stages: before, during and after.

3. The purpose of pre-control is mainly to reduce the probability of loss, and the control during and after the event is mainly to reduce the actual loss.

Third, risk transfer.

1. Risk transfer refers to the act of transferring the transferor's risk to the transferee through the contract.

2. The risk transfer process can sometimes greatly reduce the risk of economic entities.

Fourth, risk retention.

The risk is retained, that is, the risk is taken. If a loss occurs, the economic subject will pay for it with any funds available at that time.