Concept and Types of Risks in the investment

Credit Risk

The Credit risk is the exposure that arise as a result of the failure of the opposing party meet them obligations. Credit risk can be sourced from various functional activities of the bank. Such as lending, Treasury activities and investment, and trade financing activities recorded in the books of the bank.

Market Risk

The Market risk is the exposure that arise due to the movement of market variables (interest rate and exchange rate) from a portfolio owned by the bank, which reverses direction than expected (adverse movement), can result in losses for the bank.

Liquidity Risk

The Liquidity risk is the exposure arising among other things because the bank is not able to meet obligations at maturity.

Operational Risk

The Operational risk is the exposure arising among others because of the insufficiency or not functioning internal processes (process factors). Also there is a mistake or fraud man (human factors). The failure of the system (system factors) in the records, books and reports the transaction complete, correct and timely. Including failure to comply with the provisions in the regulations. Who are internal and will apply, or the existence of a problem external (external factors). Such as changes to regulations affecting the operations of the bank.

legal risk

The legal risk is the exposure that arise due to the weakness of the juridical aspect, among others due to lawsuits. The absence of legislation that supports. The weakness of the Alliance as the fulfillment of the terms not legitimately. A the contract and the binding of collateral that is not perfect.

Reputational Risk

The reputational risk is the exposure due to negative publicity associated with the business activities of the bank or negative perceptions towards the bank.

Strategic Risk

The strategic risk is the exposure due to the determination and implementation of the bank strategy is not appropriate, business decision-making is not appropriate or less bank responsive against external changes.

Risk Compliance

Compliance risk is the exposure that cause the bank does not comply with or not implementing legislation and other applicable provisions. Compliance risk management is complete through the application of the system of internal control on a consistent basis.