Current risks facing organizations engaged in international finance activities
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RISKS FACING ORGANIZATIONS IN INTERNATIONAL FINANCIAL ACTIVITIES
Economic risks
· Risk of insolvency of the buyer,
· Risk of protracted default - the failure of the buyer to pay the amount due within six months after the due date, and
· Risk of non-acceptance
· Surrendering economic sovereignty
Political risks
· Risk of cancellation or non-renewal of export or import licences
· War risks
· Risk of expropriation or confiscation of the importer's company
· Risk of the imposition of an import ban after the shipment of the goods
· Transfer risk - imposition of exchange controls by the importer's country or foreign currency shortages
· Surrendering political sovereignty
Organizations engaged in international finance activities are tormented by a market based exchange rate will change whenever the value of either of the two component currencies ...
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