A Framework for Setting Risk Appetite

Learn the 12 elements of a risk appetite framework.

The risk appetite statement is an expression of the amount and type of risk that the institution is willing to accept in the pursuit of its business. The framework you set up should provide a structured approach to the management, measurement, and control of this risk.

This white paper discusses what a risk appetite statement is, its components, and how you can use it. It also walks you through the difference between a risk appetite statement and a risk appetite framework, and talks about the 12 elements you need to create a risk appetite framework.