The risk represents the probability or the threat of damage, injury, loss or any other situation caused by external or internal vulnerability and that can be avoided by particular preventive actions. Information about the risks posed by financial products is published by the National Bank of Moldova as part of the information campaign launched together with the National Commission for Financial Markets within the financial education project “Learn. Give Sense to Money”, IPN reports.
The financial risks reside in the deterioration of the value of owned savings or investments or in the unexpected rise in interest rates on taken out loans. A financial product can pose a number of simultaneous threats.
Consumption loan – when the interest rates grow, the monthly payment for a loan with a floating interest rate increases (risk of interest rates); Home loan – when the local currency depreciates, the monthly payment for a loan provided in foreign currency rises (currency risk); Investments (real estate, shares) – value of investments declines when there are economic changes or the demand decreases (market risk); Bank deposit – when the rate of inflation exceeds the return obtained by the deposit, its real value declines (risk related to inflation).
By purchasing insurance products, the persons can protect themselves from particular risks, such as risks related to incendiarism. In the case of financial risks, the protection measures are more complex and depend on the capacity to understand the financial products.
The persons with a low level of education, those with low incomes and the marginalized groups are exposed to financial risks the most. If the conditions in which a financial product is provided are not fully understood, the person should better give up obtaining or using it or should seek advice from a friend or a relative.