1. Market Risk

Market risk refers to the potential for financial loss due to changes in market variables such as interest rates, exchange rates, equity prices, and commodity prices. 

Key Aspects:

• Interest Rate Risk: Impact of changes in interest rates on bond prices, loan portfolios, etc.
• Foreign Exchange Risk: Impact of currency fluctuations on international transactions or investments.
• Equity Risk: Losses due to changes in stock prices.
• Commodity Risk: Volatility in commodity prices affecting business operations or investments.

2. Credit Risk

Credit risk is the potential for loss due to a counterparty failing to meet its contractual obligations, such as default on a loan or bond.

Key Aspects:

• Default Risk: Borrower fails to repay.
• Concentration Risk: Overexposure to a single counterparty or sector.
• Counterparty Risk: Failure of a counterparty in derivative transactions.

3. Liquidity Risk

Liquidity risk is the risk that an entity may not be able to meet its short-term financial obligations due to the inability to liquidate assets or obtain funding.

Key Aspects:

• Funding Liquidity Risk: Difficulty in raising cash when required.
• Market Liquidity Risk: Inability to sell assets quickly without significant price concessions.

Riskpro Offerings:

1. Setting Market / Credit Risk Model including stress testing.
2. Drafting / reviewing existing Investment / Risk Management / Credit / Market / Liquidity Risk Management Policy,
3. Reviewing existing mechanism in line with the regulatory requirements from RBI / SEBI / IRDAI and doing gap analysis.
4. Retainership for providing regular support (1 week per month or 15 days per quarter)

Please email info@riskpro.in for more details on Market, Credit and Liquidity Risk Management consulting services.