Economic capital / Other risks [28]

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Bullet points include: Strategic risk is a very important risk category in practice Especially for less regulated businesses Are we following the right business strategy, pursuing the right markets, executing strategy well in them, choosing the right partners, pursuing the right mergers and tie-ups, locating manufacturing, sourcing etc. effectively, … Excluded from Operational Risk under Basel II Ultimately regulation of most firms in financial sector implicitly looks to protect customers (depositors, policyholders, beneficiaries) against outcome if business model is bust Ability to raise new capital if needed an important ingredient in a robust business

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