Term:
Market risk
Definition:

The risk of losses on financial instruments arising from changes in market prices. Market risk covers interest-rate, foreign exchange, equity price, and commodity-price risk. As financial intermediaries that take positions in financial instruments, such losses in value affect the income and capital of deposit-takers. The duration of assets and liabilities can be used to estimate potential losses arising from changes in market interest rates. Another approach is through the use of stress tests.

Domain:
Finance
Source:
IMF, 2004, Compilation Guide on Financial Soundness Indicators, IMF, Washington DC, Appendix VII, Glossary
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