In Finance, What Is a Real Return?

Financial risk refers to financial-related risks, such as financial market risk, financial product risk, and financial institution risk. The consequences of a financial institution's risks often outweigh its effects. The risks of financial institutions in specific financial transaction activities may pose a threat to the survival of the financial institutions; a specific financial institution that is in crisis due to poor management may pose a threat to the stable operation of the entire financial system; Systemic risks and malfunctions of the financial system will inevitably lead to chaos in the entire social and economic order, and even cause serious political crises.

Basic Information

Book title

Financial risk

Category

Market risk

Market risk

The so-called systemic financial risks and global financial risks are relative to individual financial risks or local financial risks.

From the lessons of some countries in the world, no matter what the cause of the financial crisis, the financial crisis will eventually manifest itself as a payment crisis, that is, either the foreign debts that are due or the banking system can no longer meet the domestic

Finance is the core of modern economy,

The consequences of a financial institution's risks often outweigh its effects. The risks that financial institutions have in specific financial trading activities may pose a threat to the survival of the financial institutions; a specific financial institution that is in crisis due to poor management may have a risk to the entire

Financial risk is related to the way a company raises funds. We usually look at a company by

Overview of financial risk management

Financial risk management is the profit and loss between for-profit and non-profit organizations in measuring and controlling risks and returns. The term financial risk management is at the core of the financial language. along with

The so-called systemic financial risk refers to the concentrated outbreak of various risks. Generally speaking, whether there are systemic risks, we must consider the general factors such as the internal and external economic and financial environment, the operating conditions of financial institutions, the debt levels of the government and private institutions, and fluctuations in interest rates and exchange rates. The impact of sudden factors is most typical of the "Black Monday" stock disaster in the United States on October 19, 1987. The remarks made by a person in charge of the central bank are reminiscent of the collapse of Wenzhou Liren Group. So, will China have systemic risks? I don't think so. However, although far-sighted, there are near-term concerns.

From a long-term perspective, despite the structural problems, China's economy is still in a period of rapid growth, providing the most favorable external guarantee for financial stability; the Chinese economy is gradually transforming towards domestic demand, and the external impact on the Chinese economy Force is also declining. Moreover, for a long time, the supervision of Chinese financial institutions by the regulatory authorities has been strict, and the issues of leverage, virtualization, integration, and derivatization of financial institutions have not been prominent, and finance and the real economy have been able to better fit together. In contrast, in Europe and the United States, the subprime mortgage crisis in the United States was caused by the excessive leverage and derivatives of financial institutions and the overly loose supervision of the regulatory authorities; the structural problems caused by the weak domestic economic growth and high government welfare and high debt Lead to the European debt crisis. China's economy is stingy, but it is under control. The impact of the European debt crisis on China's economy is smaller than that of the US subprime mortgage crisis.

In terms of near-term worries, the main line of the central economic work is "striving for progress while maintaining stability" and insisting on the word "stability". However, there are many hidden concerns in practice: from the perspective of the financial system, the increase in bank loans in the past three years has accounted for more than 50% of the loan stock of various banks, and these loans have not yet passed the test of the complete economic cycle.

From the perspective of the real economy, the majority of small and medium-sized enterprises, especially small and micro enterprises, have extremely low cost and profit margins. Industrial prosperity is strong in the financial industry, and the phenomenon of rapid growth in banking profits and decline in real business profits is not normal. In addition, the limited financing channels for small and micro enterprises have led to a growing number of private loans and higher interest rates over the past few years, which has directly triggered a series of private loan events. In the past four months, the State Council executive meeting has conducted three special studies on the deployment of policies and measures to support small and micro enterprises, and has sent positive signals to the society. To solve these problems, the key lies in regulation and supervision. Regulation can be described as a failure to retreat: we should continue to tightly control housing prices, but this will affect the development of the real economy and then the stability of the financial system. This really makes people "blank in their hearts". In the face of these difficulties, the core of its governance lies in more sparse and less blocking, and more in taking less. Only in this way can we effectively prevent systemic financial risks and implement "strive for progress while maintaining stability".