ERM concepts and Risk categorisation [26]

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Bullet points include: Risk profile: a complete description of the risk exposures of an organisation, including potential future risks Risk appetite: the degree of risk an entity is willing to accept in order to achieve objectives – specified as enterprise-wide targets/limits with detailed breakdowns Risk tolerance: a more detailed set of statements, many quantitative or statistical, applying to business units or specific categories of risk Risk limits: guidelines setting limits on business unit actions – operating within permitted risk tolerances if risk limits are met Risk capacity: how much risk an entity can handle, as measured by (say) Economic Capital, within its tolerances/limits

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