Risk Identification
Introduction
Risk management is a structured approach to managing uncertainty related to a threat through a sequence of human activities that include risk identification, analysis and evaluation, and then establishing treatment strategies using managerial resources. Strategies include transferring the risk to another party, avoiding the risk (that is, reducing its probability or impact to 0), reducing the negative impact of the risk, and accepting some or all of the consequences of a particular risk through an informed decision.
Sometimes risk management focuses on containing risk from physical or legal causes (for example, natural disasters or fires, accidents, death, or lawsuits). On the other hand, financial risk management focuses on risks that can be managed using financial and commercial instruments.
The objective of risk management is to reduce different risks relating to a preselected area to a level accepted by society. It can refer to numerous types of threats caused by the environment, technology, humans, organizations, and politics. On the other hand, it involves all the available resources of human beings or, in particular, of a risk management entity (person, work group, organization).
Thus, enterprise risk management (ERM) is a process carried out by the board of directors of an entity, the administration and the staff of said entity. It is applied in the establishment of enterprise-wide strategies, designed to identify potential events that may affect the entity and manage risks to provide reasonable security and integrity regarding the achievement of objectives. When managing risk in business trips, you should start with a prior evaluation of the trip and an analysis of the situations that may arise during the trip. Subsequently, policies will be designed to reduce the detected risks and, finally, the Business traveler must be insured against risks not detected or previously impossible to eliminate.[1].
Types of financial risks
• - Market risk, as a consequence of fluctuations in financial markets, and which distinguishes:
- Exchange risk"), consequence of the volatility of the foreign exchange market "Currency (currency)").
- Interest rate risk, consequence of the volatility of interest rates.
- Market risk (in a restricted sense), which refers specifically to the volatility of the markets for financial instruments such as stocks, debt, derivatives, etc.