ERM concepts and Risk categorisation [9]

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Bullet points include: Quantitative? Qualitative? Risk measures, hedging, pricing, ... Governance, culture, disciplines, policies, ... Value-at-risk, TVaR, Probability of default, expected/unexpected loss, maximum loss, volatility, RAROC, economic capital, mathematical techniques Risk appetite statements, risk challenge, misalignment of interests, Board engagement, risk capture and ranking, workshops, processes, ... Answer: both C.f. stress testing and reverse stress testing involve defining scenarios that might be problematic, with less focus on probability of outcome (although usually still some quantification of impact)

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