The growth of the small business in china

More words...

Financial risk

Financial risk is the possibility that shareholders will lose money when they invest in a company that has debt, if the company's cash flow proves inadequate to meet its financial obligations. When a company uses debt financing, its creditors are repaid before its shareholders if the company becomes insolvent. Financial risk also refers to the possibility of a corporation or government defaulting on its bonds, which would cause those bondholders to lose money.

Financial risk is one of the high-priority risk types for every business. Financial risk is caused due to market movements and market movements can include host of factors. Based on this, financial risk can be classified into various types such as Market Risk, Credit Risk, Liquidity Risk, Operational Risk and Legal Risk.

Spanish translation: Riesgo Financiero

Examples:

• "The optimism correlates with risk aversion, rather than taking on more risk … and likewise when they feel more pessimistic they would more risk adverse. However, Mr Oliver thinks these findings could help consumers, marketers and investors and also help manage problematic financial risk-taking.” Found in: http://www.abc.net.au/news/2017-08-05/gambling-finance-risk-taking-impacted-by-luminance/8777464

•  “Brexit poses global financial risk, Bank of England warns. The Bank of England has warned that uncertainty about the EU referendum is the "largest immediate risk" facing global financial markets.” Found in: http://www.bbc.com/news/business-36548460

Reserve Ratio

The reserve ratio is the portion of depositors' balances that banks must have on hand as cash. This is a requirement determined by the country's central bank, which in the United States is the Federal Reserve. The reserve ratio affects the money supply in a country at any given time.

Also known as Cash Reserve Ratio, it is the percentage of deposits which commercial banks are required to keep as cash according to the directions of the central bank.

Spanish translation: Coeficiente de reserva

Examples:

• “Many central banks, especially in developing and emerging markets, use a required reserve ratio (RRR) or cash reserve ratio (CRR) as a tool of monetary policy. By changing the ratio, central banks can influence the growth of credit”.Found in: http://www.centralbanknews.info/p/reserve-ratios.html 

• “The People's Bank of China (PBOC) has cut the reserve requirement ratio (Reserve Ratios, RRR) for the banks by a full percentage point, taking the ratio down to 16 percent”. Found in: https://www.cnbc.com/2017/01/22/china-cuts-reserve-ratios-for-big-5-banks-temporarily-amid-cash-crunch-sources.html

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