Market risks refer to the risks of losses faced by financial institutions and investors due to market price fluctuations, exchange rate changes, interest rate changes and other reasons. The main sources of market risks include stock markets, bond markets, exchange rate markets and commodity markets.

Credit risks refer to the risks that the creditor cannot recover its due principal and interest because the borrower or other relevant parties are unable to perform their contractual obligations. This risk mainly manifests as default risk and credit rating reduction risk. Credit risk is the most common and most likely type of financial risk

Interest rate risks refer to the risks of financial losses faced by financial institutions and financial products due to changes in interest rates. Interest rate risk mainly manifests as balance sheet mismatches and net worth fluctuations caused by market interest rate fluctuations.

Liquidity risks refer to the risks that financial institutions and financial products are unable to meet capital needs in a timely and sufficient manner when faced with the asymmetry of capital inflows and capital outflows. Liquidity risk mainly manifests as balance sheet mismatches and cash flow ruptures.