In the Banking Professional Qualification Column, we have carefully prepared the "2017 Junior Bank Risk Management Key Points: Country Risk" for the candidates. Students, please start learning as soon as possible and be fully prepared. I wish you all a smooth passing of the exam.

Country risk

Country risk refers to the losses that economic entities suffer due to economic, political and social changes in other countries when conducting international economic, trade and financial transactions with non-residents. risks of.

National risks can be divided into three categories: political risks, social risks and economic risks.

Political risk refers to the risk that commercial banks, subject to political restrictions in a specific country, cannot repatriate loans in that country and suffer losses. Political risks include regime risks, political situation risks, policy risks and foreign relations risks.

Social risk refers to the risk of losses caused by the instability of the social environment in a specific country due to economic or non-economic factors, which prevents lending commercial banks from repatriating loans in that country.

Economic risk refers to the risk that overseas commercial banks will suffer losses due to being unable to remit loans in that country only due to direct or indirect economic factors in a specific country.

Country risk has two basic characteristics:

First, country risk occurs in international economic and financial activities, and there is no country risk in economic and financial activities within the same country; < /p>

Second, in international economic and financial activities, whether it is the government, commercial banks, enterprises or individuals, they may suffer losses caused by country risks.