Financial risk refers to the possibility of incurring financial losses or experiencing adverse financial outcomes due to unexpected changes or events in the market or economic conditions.

Financial risk can arise from a variety of factors, such as changes in interest rates, currency fluctuations, changes in commodity prices, credit default risk, and market volatility.

Financial risk can impact individuals, businesses, and even entire economies, and can lead to financial instability and economic crisis if not properly managed.

Managing financial risk typically involves identifying potential risks, developing strategies to mitigate or avoid those risks, and regularly monitoring and adjusting risk management strategies as necessary.