ERM Glossary: Risk management policy or Risk policy

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A firm’s risk management policy (or ‘risk policy’ for short) outlines the way in which it manages (or plans to manage) each relevant and material category of risk, both strategically and operationally. The policy should also describe how the way it manages risks link with the firm’s risk appetite, risk tolerance and risk limits, supervisory capital requirements and economic capital. It should also describe the processes and methods the firm uses to monitor risk.


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