Genesis of the financial risk’s definition

Abstract

Accuracy and clarity in the conceptual-categorical framework are of paramount importance for investigating any issue and selecting effective management tools and methods. The purpose of this article is to refine the conceptual-categorical framework in terms of defining the concept of "financial risk," which will allow considering the specificities of the environment in which financial risks arise and using the most adequate tools for crisis regulation of financial flows. This article provides basic characteristics of risk theory. The history of the emergence of risk as an economic category is analyzed. The concept of "risk" is refined based on the analysis of existing definitions of the category through the exploration of risk concepts aimed at specifying its scale and consequences. The theories of risk perception in the 20th century are systematized. Special attention is paid to the emergence of risk in the theory of systematics and the theory of non-equilibrium (entropy) processes. The foundations of financial risk management emergence are analyzed. Approaches of authors to interpreting the category of "cash flow" are analyzed. A comparative analysis of the concepts of "cash flow" and "financial flow" is conducted to identify characteristic, similar, and distinct features of each. The content of the concept of "financial risk" in the system of crisis regulation of financial flows is refined by integrating defined key features of conceptual sets "financial flows" and "risk" and considering the peculiarities of a systemic approach to managing the activities of economic agents.

Keywords

• risk
• financial risk
• cash flow
• financial flow
• crisis regulation