I though it is, but apparently it is not.
Can someone elaborate?
No it is not.
Sovereign risk arising from ability (not willingness) to pay is financial risk
I agree that it definitely is and I got it wrong but I disagree.
If you are expecting settlement of something and a cash inflow that doesn’t happen, that is financial risk and would affect cash balances
Settlement, Tax, and Accounting risks are non-financial.
By that logic almost every risk is financial. Settlement is NOT a financial risk.
CFA way: not financial.
My opinion:
If the counterparty is not able to settle timely because of an operational issue: not financial since it caused operations risk.
If the counterparty does not pay because they are illiquid or insolvent: financial, since it has to do with their creditworthines. In this case it would be a consequence of credit risk, which is clearly financial, even in the curriculum.
email that to cfai