Risk Intelligence Framework
A risk management framework needs to provide a focus and level of detail, along with tailored solutions, for effective risk management.
Nowadays, organizations face an unprecedented level of uncertainty and an increasing pace of change. Holistic risk management enables organizations to navigate complexities and uncertainties in a cohesive manner, aligning risk management with their strategic goals and fostering resilience in a dynamic environment.
The efforts on managing risk holistically or in a more integrated fashion are critical in the long run. Risk management, or at a higher level, risk intelligence, becomes a strategic imperative for business execution.
Risk Identification: Identifying various risks such as liquidity risk, credit risk, interest-rate risk, market risk, foreign-exchange risk, and sovereign risk.
Stakeholder Engagement: Recognizing the interests of stakeholders and incorporating their participation to enhance the organization’s management capabilities.
Risk Measurement: Calculating the overall exposure to various risks. Techniques such as value at risk (VAR) are used to quantify overall risk exposure.
Risk Optimization: Mixing and matching various risky assets to achieve an acceptable overall risk level and the greatest shareholder value consistent with that level.
Continuous Monitoring and Adjustment: Adjusting the portfolio to maintain an acceptable overall risk level. Traditional management tools, including reliance upon bank capital, continue to play a role in risk management.
A risk management framework needs to provide a focus and level of detail, along with tailored solutions, for effective risk management. View risk management as an integral part of strategy management practices to accelerate performance and improve business maturity.
Follow us at: @Pearl_Zhu
Nowadays, organizations face an unprecedented level of uncertainty and an increasing pace of change. Holistic risk management enables organizations to navigate complexities and uncertainties in a cohesive manner, aligning risk management with their strategic goals and fostering resilience in a dynamic environment. The efforts on managing risk holistically or in a more integrated fashion are critical in the long run. Risk management, or at a higher level, risk intelligence, becomes a strategic imperative for business execution.
Risk Identification: Identifying various risks such as liquidity risk, credit risk, interest-rate risk, market risk, foreign-exchange risk, and sovereign risk.
Stakeholder Engagement: Recognizing the interests of stakeholders and incorporating their participation to enhance the organization’s management capabilities.
Risk Measurement: Calculating the overall exposure to various risks. Techniques such as value at risk (VAR) are used to quantify overall risk exposure.
Risk Optimization: Mixing and matching various risky assets to achieve an acceptable overall risk level and the greatest shareholder value consistent with that level.
Continuous Monitoring and Adjustment: Adjusting the portfolio to maintain an acceptable overall risk level. Traditional management tools, including reliance upon bank capital, continue to play a role in risk management.
A risk management framework needs to provide a focus and level of detail, along with tailored solutions, for effective risk management. View risk management as an integral part of strategy management practices to accelerate performance and improve business maturity.
Follow us at: @Pearl_Zhu
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