Factors that Impact Financial Risks in United Kingdom

Factors that Impact Financial Risks in United Kingdom
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Factors that Impacts Financial Risks in United Kingdom
Introduction
Financial risk management is one of the major challenges that most countries and organisation face today. According to Christoffersen (2012), financial risk management is defined as the umbrella for various risks that associates with finances within a country, organisation or any other institutions that deal with financial spending and transactions. For instance, a country may face financial risks through failure to settle its debts. In the presence of financial risk within a country or organisation, shareholders of the organisation face loss of money in case the organisation or country is unable to respond positively to the risks faced. As found by Danielsson (2011), financial risk within a country need to be taken serious through developing effective strategies to curb the financial challenges faced. Consequently, countries and organisations that face financial risks need to understand that there exist various factors that impact financial risks. Based on these factors, this paper provides adequate information on these factors and their financial impact to United Kingdom. Additionally, it provides solutions to these factors and various approaches towards dealing with financial risks.
Current Political Leadership and Stability of the United Kingdom
Since its formation, United Kingdom has been governed through a constitutional monarchy. According to the governing system of the United Kingdom, Waldron et al (2013) revealed that Monarchy of the United Kingdom is considered as the head of state while the United Kingdom head of government is the Prime Minister. Similarly, Ellram et al (2013) echoed that the politic system of the United Kingdom is a multiparty system; therefore, people have their choices of joining any political party during elections. Although, United Kingdom is considered to be a growing country in terms of its economic growth, the current political stability is below the expectation of the United Kingdom government and citizen among other countries and investors globally. For instance, Ellram et al (2013) revealed that the common currency used by the United Kingdom, Sterling is losing value against the dollar as a result the instability within the British government based on the increase fiscal deficits that the government is currently facing (Waldron et al, 2013).
According to the information released by the government on the current situation of the United Kingdom, political instability within the country shows no signs of dealing with huge deficits that the country is facing. Some of the possible courses of the problems that the country is currently facing include disagreement of the government and the opposition, poor leadership provided by the current government and ineffective strategies developed by the management team towards the governing of the country as ...