Back to Risk Measurement, Evaluation, and Communication Workbook (Download)
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It is available to Professional members for the list price.
How well does your institution understand and manage risk?
Enterprise risk management creates real value for the enterprise, making an institution more competitive and more profitable, while contributing greatly to its safety and soundness. Risk measurement, evaluation, and communication are critical pieces of an enterprise risk management framework. You must understand risk in order to manage it. And to understand it you must be able to quantify it and mitigate it with controls.
The Risk Measurement, Evaluation, and Communication Workbook addresses 1) the mechanisms available to size risks in order to compare them to each other and to prioritize risk mitigation activities, 2) the strengths, weaknesses, and limits of each approach, 3) the “watch-outs” that are especially important when sizing, 4) the output that will ultimately be needed for the next step (response), and 5) the best ways to communicate the results.
In this workbook you will find:
- Alternative approaches to sizing risk.
- The three factors to consider when sizing risk:Severity:
- What is the impact if the risk materializes?
- Likelihood: Given the risk scenario, what is the likelihood that it will happen?
- Frequency: Given the risk scenario, how often could the risk materialize?
- How to use the risk measurement process to create risk metrics.
- Tools that, when combined with internal discussion, debate, and challenge, can help create a sustainable methodology for consistent risk measurement.
- Develop an understanding of the individual and aggregate risks of your bank.
- Know which risk mitigation efforts to prioritize.
- Be able to cascade aggregate risk (through limits) to your business units.
- Engage in more fact-based discussions around capital, earnings, and liquidity at risk.