Current Location：Home||Foreign exchange risk identification

Foreign exchange risk identification

{}Posted in2023/2/25 1:58:16 | 4Browse

What f cashback forexexrebates foreign ForexrebateforExness forexcashrebate identification Foreign exchange risk identification refers to the risk management personnel cashbackforexexness the investigation Forex rebate for Exness research, the use of various methods of potential and the existence of a variety of foreign exchange risk system classification and comprehensive identification, foreign exchange risk identification to solve the main problem is: the impact of foreign exchange risk factors, the nature and its consequences, the identification of methods and their effects foreign exchange risk identification of the first step is the cognitive foreign exchange Risk: only to understand the foreign exchange risk in what kind of situation, what kind of manifestations and what kind of consequences will be caused, in order to find an appropriate management of foreign exchange risk identification task analysis of risk causes Although the root cause of foreign exchange risk is the unanticipated changes in the exchange rate, which has been very clear, but the foreign exchange risk in the specific case of the form of performance is very different, analysis Risk causes, should not only examine the direct impact of exchange rate changes, should also give full consideration to its indirect role, consider the indirect role of the mechanism of transmission, the role of the elements, the degree of action, etc. In addition, should also analyze the impact of various factors, including inflation, price changes, market size, competitive pressure, etc., and strive to do a more thorough analysis of the causes of foreign exchange risk only in this way, in order to understand the essence of the risk The most basic and common method of analyzing the causes of risk events is to create and analyze a list of risks. Specifically, it is similar to the form of a memorandum that lists the various risks faced by units, families and individuals, and relates them to the production and operation of goods and the borrowing and lending of funds. (2) The basic contents of the risk list The basic contents of the risk list include the following three aspects: First, direct losses Direct losses can be divided into two parts: one is the uncontrollable and unpredictable losses It mainly refers to losses caused by various natural disasters and environmental accidents; the other is controllable and predictable losses, which refers to losses caused by various accidents within the scope of business operations. Risk factors, risk incidents and risk loss results can be examined in relation to the various risks faced by the enterprise, so as to achieve the purpose of risk analysis Estimation of risk consequences The estimation of risk consequences is usually carried out from both qualitative and quantitative aspects Qualitative estimation is mainly to determine the type of foreign exchange risk results, such as "two-sided" risk This qualitative estimation is sometimes important because it is the basis for the overall risk management policy. For example, for those risks that are "two-sided", companies are likely to adopt hedging strategies, while for those risks that are "one-sided", insurance and internal management measures are taken to prevent them. Quantitative estimation of risk refers to the use of some mathematical models to estimate and measure the probability of the possible results of risk. Quantitative estimation of risk can be done to grasp the risk quantitatively people can determine the importance of the risk according to the amount of adverse consequences to the enterprise; then combined with the "cost-benefit" management principle, choose a reasonable management method of foreign exchange risk identification methods Risk identification has many methods, such as decomposition method, brainstorming method, Delphi method and curtain view method. A business activity may carry a variety of risks, the causes and laws of these risks are not the same according to their own laws, combined with the knowledge and experience of analysts, the overall risk of this business activity will be decomposed, will help the overall understanding of the risk and understanding, for example, the analysis of the risk of international capital market financing behavior, we can break it down into a number of Exchange rate risk refers to the uncertainty brought to the subject of foreign exchange transactions due to changes in the value of an asset, liability, earnings or expected future cash flows (whether certain or not) denominated in a foreign currency measured in the local currency as a result of exchange rate fluctuations This uncertainty is twofold: it is called the ability to make economic agents suffer losses and may also bring gains Exchange rate risk generally consists of three elements: local currency, foreign currency and time if an enterprise in a country to carry out foreign business, only in the local currency settlement, because there is no currency conversion issues, there is no exchange rate risk if an enterprise in a country in the same day income a foreign currency, while spending another currency the same, the amount of equal foreign exchange, because there is no time interval, there is also no exchange rate risk! The length of the time interval between an amount receivable or payable in foreign currency is directly proportional to the size of exchange rate risk: the longer the time, the greater the likelihood of exchange rate fluctuations and the greater the exchange rate risk, and vice versa Interest rate risk Interest rate risk is the likelihood that the actor will suffer losses due to uncertainty about changes in the level of interest rates For financial institutions whose profits generally come from the difference between the rate of return on assets and the rate of cost of liabilities, a sight A part of its asset conversion may expose itself to interest rate risk if the maturity of assets and liabilities are not properly matched, mainly in three aspects: first, the level of profit, in terms of technological innovation, cost changes, etc. Second, macro policy, in terms of policy expansion or contraction, and of course, the existence of differential interest rates due to the need to prioritize the development of a certain industry, which can also cause a certain amount of interest rate risk Third, money In a narrow sense, credit risk refers to the possibility that the borrower will not be able or willing to fulfill the principal and interest repayment agreement at maturity, resulting in losses to itself, which is actually a default risk. Credit risk is a degree of possibility of suffering losses or gaining additional income in the operation activities Credit risk acts on the whole process of operation activities and runs through all aspects of the sources and applications of working capital; it not only refers to the risk on assets but also includes the risk on liabilities; there are risks on both on- and off-balance sheet business Therefore, it is necessary to timely and accurately identify the various inducing factors of credit risk and systematically and continuously grasp The liquidity risk refers to the ability of financial assets to be liquidated quickly without losses, which requires the ability of economic agents to liquidate their assets immediately or to obtain available funds from outside at any time. For enterprises, especially financial institutions, due to the special nature of their business functions, if their loan commitments cannot be fulfilled at any time or their customers demands for cash cannot be met in time, it will bring certain difficulties to their next normal operation. It is a method of research and consultation, which is meant to describe a meeting where people can express their opinions freely and without any constraints. If you want to hear more opinions, you can meet in groups. The participants usually consist of experts in risk analysis, risk managers, experts in specialized fields, and experts with strong logical thinking and generalization skills. For example, if a company is going to invest in a developing country to set up a factory, it can first consult with experts from various parties, such as legal experts, financial accountants, engineers, local government foreign investment authorities, etc. In addition, it can also hold a "Zhuge Liang meeting", so that everyone can think about various possible situations: open up ideas In addition, the results of the brainstorming method should be In addition, the results of the brainstorming method should be carefully analyzed, and should not be taken lightly nor blindly accepted. However, when the finished garments arrived at the company, the managers were surprised to see that the fine garments, which should have been monochromatic, were now "light and strange" because of the local water quality, which had caused the dye properties to fade, something that had previously seemed very bizarre. It is named after Delphi, the site of the temple of Apollo, to indicate that it is a method of gathering the wisdom of the people to make accurate predictions - this method was later widely used in risk management and risk decisions; its basic features are: the participants are anonymous to each other, the responses are processed statistically, and the statistical results of the previous survey are fed back to the participants, and the process is repeated until the organizers are satisfied with the results To stop the whole process are anonymous, so as to avoid the influence of authority, seniority, persuasion, pressure and other factors, questioning for multiple rounds of iterations, each iteration with statistical feedback on each item, including the median value and some dispersion of the measured value, sometimes to provide the probability distribution of all responses to the question answer results using the "quadratic point "method of statistical processing, that is, all the responses are arranged according to certain rules, this arrangement will do "quadratic" processing, divided into four intervals, the corresponding division point is called "lower quadratic", "median" and "median". "Respondents whose answers were outside the upper and lower quartiles could be asked to correct their answers or to state their reasons, providing the necessary feedback for each iteration, and when the last statistical results were given back to the participants. They will adjust their responses so that a new round of findings is obtained: the result of the iterations is that a certain convergence of expert opinions finally occurs, i.e., opinions gradually converge Delphi method applied to risk analysis requires attention to (1) anonymity; participating experts do not know each others names (2) avoiding the influence of personal authority, seniority, pressure, etc., especially the tendency of the moderator or organizer opinion, (3) the questions should be focused and arranged to attract the interest and attention of experts, (4) avoid combination of events if a matter includes two aspects, on the one hand, the expert agrees, and on the other hand, disagrees, which makes it difficult for the expert to make a reply (5) to limit the number of questions a strand that 20-25 is appropriate, too many questions are not only difficult to arrange, but Too many questions are not only difficult to arrange, but also easy to cause cross and combination: (6) answer the questions in different ways such as the ranking of possible solutions, or answer a certain number of statistical collation methods are also different, the conclusions will also be different Therefore, the conclusions also need to be re-analyzed curtain view analysis method curtain view analysis method refers to the risk analysis process, the use of curtain view to depict the key factors that can cause the risk and its degree of influence curtain view is the risk state (including It can be either textual, graphical, diagrammatic or curvilinear. The focus of the scenario analysis is: What will happen when a factor changes? What kind of risks will occur? How strong will the impact be? By selecting some key factors, then like a movie screen - scene by scene demonstration, comparison of different results, in a common, visual way, for reference in the decision-making can be seen, the function of this method is mainly to examine the scope of risk and the development of the situation, and to make a comparative study of various situations, in order to choose the best effect Therefore, scenario analysis is particularly suitable for risk analysis of enterprises. The process of scenario analysis mainly includes screening, monitoring and diagnosis screening is the process of classifying and selecting potential risks by some procedure. The different consequences are categorized so that risk managers can deal with different risks in different ways Monitoring is the process of observing, recording and analyzing events, processes, phenomena and consequences after a certain risk has emerged, and making predictions and alerts on the development and evolution of risk trends Diagnosis is the evaluation of the precursors of risks and losses, the consequences of risks and various causes, identifying the main causes and conducting detailed The results of the scenario analysis are expressed in a visual and easy-to-understand manner For example, it can provide decision makers with the best, worst and most likely prospects for a certain investment opportunity in the future, and can give details of possible events and risks in these three different scenarios Scenario analysis is a thinking process that enhances the ability to accurately analyze the future It can alert decision makers to possible risks or crisis situations caused by a certain measure or policy It can alert decision makers to the potential risk or crisis consequences of a measure or policy, suggest the scope of risk to be monitored, examine the significant impact of certain key factors on future processes, and, when there are multiple conflicting scenarios, allow for more effective choice and comparison. However, this analysis method also has some limitations, that is, it is prone to the phenomenon of so-called "TunnelVision", which is like looking at the outside world from a tunnel, and it is difficult to see a more comprehensive situation: because all curtain view analysis revolves around the analysts current considerations and the amount of information obtained, therefore, a certain bias is bound to arise, so the curtain view analysis method should also be used in combination with other analysis methods
↑