Financial Risk and Insurance
It is in the markets for finance and insurance that risk, risk estimation, and risk management come into still sharper focus. Financial investments are by definition risky. Risky investments are hedged against with other forms of risk management, sometimes discussed in terms of insurance, but more often in terms of exotic derivatives, such as "credit default swaps" (CDS). Insurance is a specific technology developed for managing and minimizing the impact of a variety of losses, or unexpected demands on resources. African Americans and Latinos face the greatest difficulty in gaining access to financial services. These racial and ethnic minorities are far less likely to have bank accounts, and as a result, they are dependent upon, and placed at substantial financial risk by payday lenders, check cashing services, and other institutions that prey on the marginalized consumer. Payday lenders prey on a segment of the vulnerable credit market that deals with customers who have checking accounts.