There really is no such thing as financial risk.
Yes, being a CFA chartholder and a certified Risk Manager doesn't stop me from saying this.
And here is why: there are humans beyond any numbers.
If you consider the financials of a company,
of a sector,
of a country,
or the worldwide
you have really to look at the people that make up each of these.
Look at the team, the customers, the suppliers, the investors, the rulers..as the case applies.
Understand their motivation.
Look at their behaviours.
Assess their sentiment.
Seek to discover how they think.
See their collaborations, interactions etc
And if you get it right you can foresee financial trends.
Of course all this behavioral and psychological analysis is nowhere as straightforward as financial models are.
Its equally fascinating and complicated.
And its worth your time because it gives you insights whereas refering to financial risks it's disempowering.
"Financial risk" is too abstract to allow us to prepare or manage.
Zoom in to see who and how is creating the risk. An unfit leader? A bunch of overconfident managers? A swarm of greedy investors? It takes many forms and yet is all human-driven