Cause and Control of the Main Risks for Financial Derivatives
DOI:
https://doi.org/10.54691/bcpbm.v39i.4018Keywords:
Financial derivatives; Credit risk; Liquidity risk; Market risk.Abstract
With the development of the economy, the risks of financial derivatives derived from traditional financial products have gradually become apparent. Based on published papers, this paper analyzed three main risks of financial derivatives, namely credit risk, liquidity risk and market risk, and to seek ways to avoid them. According to the research findings, countermeasures including improving the transparency of derivatives markets, establishing internal management systems, strengthening risk monitoring and developing human resources can be used to avoid risks to a certain extent. However, finding effective ways to avoid risks is still a long-term and difficult task in front of the general economic workers.
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