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ERM concepts and Risk categorisation [46]

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Bullet points include: Step E.g. Identify risks What risks might the firm face during strategic planning period (e.g. 3 – 5 years)? [quantitative and qualitative] Decide on capital relevance Which of these risks are best mitigated by capital and which by management actions (e.g. reputational risk)? Quantify and identify management actions What are suitable management actions to adopt for non-capital covered risks and how big are these risks? Sensitivity analyses How robust is the risk analysis, what is it most sensitive to? Firm-specific stress tests What are possible future scenarios we might need to navigate and what are their likely impacts? External stresses What other stress tests should also be analysed? [e.g. SCR] Going concern What are key drivers to remaining a going concern? SCR Is resulting risk understanding adequately captured by standard formula SCR (or internal model, if appropriate)?

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