Up Load Risk Management

8/20/2019 Up Load Risk Management

1/41

INTRODUCTION

• Each organization has a “mission” therefore, it must

address the problem of protecting against events thatcan have “risk” (and, as a result, all of the preliminary

intermediate objectives).

• Risks, are understood as “possible damage”, are

connected to situations of uncertainty, with possible

negative evolution, to which every organization is

eposed in carrying out its business


2/41

INTRODUCTION

• Companies faced dierent types of risks in aspecic manner;

• Methods of “denition and control! "hich arecollected in a systematic approach kno"n as “Risk

Mana#ement! reasona$le defense a#ainst thepossi$le %erication of harmf&l e%ents'

• Risk Mana#ement denes as a #ro&p of actionsthat are inte#rated "ithin the "ider conte(t of acompany or#ani)ation! "hich are directed to"ardassessin# and meas&rin# possi$le risk sit&ationsas "ell as ela$oratin# the strate#ies necessary formana#in# them'


3/41

!

Increased

Risk

Introduction

The rising importance of risk management Infinancial institutions

More complex markets " Global markets

" Greater product Complexit

" Ne! businesses "e#banking$

merchant banking$%& " Increasing competition

" Ne! plaers

" Regulator imbalances

Global trends are leading to Risk…


4/41

#

'inancial

Risks Operational Risk

Reputational Risk

(usiness and strategic risks

Market Risk

Credit Risk

Introduction

Risk is multidimensional


5/41

INTRODUCTION*

O$%io&sly! Risk Mana#ement can$e tar#eted to"ard all or only some

of the “dierent types of potentialrisk! that is! the specic areas ofpossi$le &ncertainty that aect the

life of a company'


6/41

Introd&ction +

Company risks are normallyclassied "ithin three lar#ecate#ories,

-'Risks inherent to the e(ternalconte(t .e'#', emer#ence of&nfa%ora$le la"s and/or re#&lations;

ne#ati%e chan#es to marketconditions; technolo#ical inno%ationsthat fa%or competitors; etc'0; 1


7/41

INTRODUCTION +

*' Risks inherent to operati%emana#ement .e'#', non compliance "ithcontract&al re2&irements; possi$le loss of

market share; possi$le loss of skills;possi$le physical dama#e to personnel;possi$le en%ironmental poll&tion; etc'0;

+' Risks inherent to nancial mana#ement.e'#', di3c&lty in collectin# acco&nts

recei%a$les; &nfa%ora$le chan#es ine(chan#e rates; im$alances in li2&idity;etc'0'


8/41

Introd&ction 4

• 5ach of these risks may lead todirect and/or indirect dama#e to

the or#ani)ation! "ith economicimplications that may also $econsidera$le in the short! medi&m

and lon# term

6


9/41

INTRODUCTION 7

• The attention #i%en to RiskMana#ement! in terms of the 2&alityand 2&antity of allocated reso&rces!

m&st $e con#r&ent! not only "iththe type of considered risk!

• $&t also "ith the concept of the

pro$a$ility "ith "hich a potentialne#ati%e e%ent co&ld occ&r and theserio&sness of its conse2&ences'


10/41

Introd&ction 1

• 8 complete mana#ement of risks aims toprotect! from all points of %ie", 9notonly the %al&e already created $y theor#ani)ation; 9$&t also its f&t&reopport&nities! fa%orin# sec&re #ro"th

• Choices for correct risk mana#ement can"idely dier from company to company!dependin# on the e(ternal and internalconte(t in "hich the company "orks! for"hich the concept of a “sit&ationalapproach is f&lly applica$le

-:


11/41

Introd&ction

• One can “slice and dice these m&ltiple dimensionsof risk

$$

PortfolioConcentration

Risk

Transaction Risk

CounterpartyRisk

Issuer Risk

Trading Risk

Gap Risk

Equity Risk

Interest Rate Risk

Currency Risk

Commodity Risk

FinancialRisks

OperationalRisk

Reputational

Risk

Business andstrategic risks

Market Risk

Credit Risk

)*pecific

Risk+

General

Market

Risk

Issue Risk

% &or more details, see 'hapter($, “Risk )anagement” by 'rouhy, *alai and )ark


12/41


13/41

RI5M5NT?ROC5


14/41

RI5M5NT?ROC5


15/41

RI5M5NT?ROC5


16/41

?rocess ?hases *

• Identifyin# the areas of risk that m&st $econsidered! d&e to the specic com$ination

of market! prod&ct/ser%ice!man&fact&rin#/s&pply process as "ell ase(ternal references .instit&tions! s&ppliers!$anks! &nions! etc'0;

• Con#r&ently denin# an identication andassessment acti%ity sched≤

• Or#ani)in# the necessary reso&rces!startin# $y denin# d&ties and

responsi$ilities'


17/41

In this phase! therefore! the limits of theapproach are recorded and the $ase for the

de%elopment of the operati%e system iscreated! ha%in# a f&ndamental concept asreference criteria! "hich is the kno"led#ethat,

•?otential risks can in%ol%e the or#ani)ationon all le%els;

• The most ne#ati%e conse2&ences do not

necessary refer to risks attri$&ta$le to theshortBsi#hted $eha%ior of those "ho occ&py&pper mana#ement positions'

-A


18/41

Risk identication

• The ne(t phase! "hich is related to identifyin#

potential risks and their description! m&st $econfronted $y analy)in# all possi$le so&rces ofrisk .s&ch as! for e(ample, the positions of thestakeholders! market chan#es! man&fact&rin#errors or "ork accidents! etc'0! "ithin the areas of

risk that "ere taken into consideration "hendenin# the conte(t'


19/41

Risk Identication

• The process of identifyin# potential risksm&st! in any case! "ork for the type ofor#ani)ation and! therefore! for the typeof prod&ct/ser%ice oered and the type

of market in "hich the or#ani)ation itselfoperates; it normally refers to, theo$ecti%es! "hich the or#ani)ation hasset for itself; the scenarios! "hich theor#ani)ation may nd it m&st face in

carryin# o&t its $&siness; the proced&resor practice! "hich the or#ani)ationadopts for mana#ement and operationalp&rposes' -


20/41

Risk identication *

• ?otential risks do not #enerally represent aneecti%e risk if the or#ani)ation does not ha%e! inreference and at the same time! a specic"eakness' This concept! "hich is $ased on themodern approach of Risk Mana#ement! thereforeforesees the creation of a list of “%&lnera$ilities.str&ct&ral! mana#erial or operati%e0 concernin#the areas of risk $ein# considered! o%er "hich the

correspondin# list of the so&rces of risk m&st $ecritically s&perimposed'


21/41

Risk identication +• 5ecti%e risk identication nally re2&ires the s&pportof reasona$le conrmations! o$ecti%e if possi$le!re#ardin# the correctness of the analysis'

• These conrmations may $e, of a direct e(perimentalnat&re .the e%ent has already occ&rred0; of an indirecte(perimental nat&re .the e%ent has already occ&rredin a similar sit&ation0; of a ded&cti%e nat&re .the ca&seE eect relationships make the e%ent appear

pro$a$le0'• In this "ay! a “risk prole is o&tlined that is specic to

each or#anisation .$y conte(t and %&lnera$ility0! to"hich the s&$se2&ent actions refer'


22/41

*'+' Risk assessment

• Fhen the risks ha%e $een identied! they m&st $eassessed .Risk 8ssessment0 $ased on, the probability that the ne#ati%e e%ent "ill occ&r; theseriousness of the direct or indirect conse2&ences ofthe e%ent itself'

• This assessment can $e more or less simple! $ased&pon the specic sit&ation! as "hat is rele%ant for thep&rpose is the a%aila$ility of &sa$le statistical data as"ell as %alidated analysis proced&res' The statisticaldata .&sa$le0 and the analysis proced&res .%alidated0can only $e ac2&ired from similar .or apparentlysimilar0 sit&ations if done in an e(tremely pr&dentmanner and only after ha%in# %eried thetransfera$ility of the conditions concernin# $oth theso&rces of risk and %&lnera$ility'


23/41

• Grom the a$o%e! in concl&sion! it res&lts that therisk assessment process #enerally follo"s paths ofanalysis "ithin an or#ani)ation that! in referenceto, the likelihood of an e%ent! refer to the

potentiality of the relati%e risk so&rce! the e(tentof the specic possi$le %&lnera$ility and the le%elof eecti%eness of the preBe(istin# control andreaction instr&ments; the serio&sness of theconse2&ences also refers! in addition to the type

and e(tent of the dama#e! to the in%ol%edo$ecti%es .in a decreasin# order of importance,the mission! the str&ct&re! the or#ani)ation andoperations0' *+


24/41

• 5ach potential risk m&st! $e percei%ed "ith#reater or less intensity! "ith re#ard to the realrisk content' Therefore! the assessment processre2&ires a constant en#a#ement directed to"ard

the o$ecti%ity of the &d#ments! in fact! if therisks are assessed in an irrational manner andtheir correspondin# priority is assi#ned in animproper manner! there co&ld $e a lack ofco%era#e and/or defense and &sef&l reso&rces

co&ld $e "asted that! if $etter applied! co&ld leadto more eecti%e mana#ement

*4


25/41

Risk Matri(


26/41

+

D i r e c t

R i s k

T a k e r s

, n a

l - e

D e a

l

. r i c e

D e a l

C o m p a r e

R i s k t o / i m i t

0 x e c u

t e

C o n

f i r m

1 * e

t t l e

M

a n a g e

( u s

i n e s s

U n

i t R i s k

Credit Risk

Market Risk

/i2uidit Risk

Operational Risk

Regulator Risk

0tc3

. o l i c i

e s M e

t h o d o l o g

i e s

I n f r a s

t r u c t u

r e

Framework

RisksRisks

F amew k

,n Independent andIntegrated (usiness

Oriented .rocess


27/41

Risk Treatment

The treatment of the potential risks is the phase in"hich the decision makin# processes $ecomepartic&larly important' It incl&des! eitheralternati%ely or in com$ination! one or more of the

follo"in# conditions,• Transfer of the risk;

•5(cl&sion of the risk;

•Red&ction of the risk;

•8cceptance of the risk or an amo&nt of the risk'


28/41

Risk Treatment *

• The selection of one or more of the pre%io&sconditions lar#ely depends on the speciccompany sit&ation .that is! the companyHs internaland e(ternal conte(t as "ell as the companyHs

real possi$ility to confront $oth of these conte(ts0and m&st $e $ased on a costB$enet analysis thatis as 2&antitati%e as possi$le in reference to theshort! medi&m and lon#Bterm period'

*6


29/41

*'4'-' Risk transfer

• This condition foresees the pers&asion of anotherparty to accept the risk! throh a contract' Thisis a typical case that concerns ins&rancecompanies! "hich is applied often "hen possi$le

.for e(ample! lia$ilities of a criminal nat&re cannot$e transferred0 e%en if at times it is done in a#eneral manner and not! rather! in f&nction of thespecic or#ani)ation .tailored co%erin#0'


30/41

*'4'*' Risk e(cl&sion

• This condition foresees the nonBe(ec&tion of the acti%ity that in%ol%es arisk that cannot $e transferred and/or

is considered to $e &naccepta$le'Nat&rally! the res&lt is a loss ofopport&nity that the acti%ity at risk"o&ld ha%e represented in any case'


31/41

*'4'+' Risk red&ction

• This condition in%ol%es the adoption ofmana#erial! technolo#ical and $eha%ioral actionsthat lo"er the pro$a$ility of risk and/or theserio&sness of the possi$le conse2&ences' The

persistence of resid&al risk is often! in any case!&na%oida$le $oth for reasons inherent to theconte(t .instit&tional! mana#erial! technolo#ical!etc'0 in "hich the or#ani)ation operates! as "ellas for the possi$le simplications and/or

omissions of the analysis'


32/41

*'4'4' 8cceptance of an

amo&nt of the risk

8ll risks that are not transferred and note(cl&ded are! as a res&lt! accepted'Fhen at least one of the follo"in#

conditions applies,•s&3ciently lo" pro$a$ility of the e%ent;

•conse2&ences of the e%ent areproportionally of little rele%ance;

•#reat $enets if s&ccessf&l'


33/41

*'7 ?lannin#

?lannin# denes the risk control methods

re#ardin#,• The interpretation! sendin# and/or storin#of incomin# data for the control process;

• The appropriate le%el and locali)ation for

the decisions and actions connected toeach type and condition of risk;

• The operati%e proced&res and/or practice;

• The control instr&ments;


34/41

?lannin#•If the control plan is s&3ciently $roadand comple(! it is recommended that theposition of a Risk Mana#er is createdto"ard coordinatin# all acti%ities and

their comm&nication! althoh it doesnot ha%e any direct responsi$ility for therisk itself'

• The plannin# acti%ity is doc&mented and

collected in a Risk Mana#ement ?lan

+4


35/41

*'1 Comm&nication

• The prole! the matri(! the risk treatment.incl&din# the costB$enet analysis0 andthe control plannin# m&st $e doc&mentedin detail in a Risk Mana#ement Report!"hich m&st $e presented to all personnelthat is in%ol%ed in any manner and "hom&st not only ackno"led#e it! $&t m&stalso share in the approach and e%ol&tion!each for his or her o"n area of interestand accordin# to each personHs le%el ofresponsi$ility'


36/41

Comm&nication

• If information only sho&ld not $eenoh! tar#eted trainin# co&rsessho&ld $e de%eloped "ith the

p&rpose of makin# the RiskMana#ement Report an eecti%emana#ement instr&ment'

• The Risk Mana#ement Reportconstit&tes the doc&ment ofreference for the entire RiskMana#ement process'

+1


37/41

*'A Checkin# and

• Checkin# and s&per%ision o%er timeconcerns all control instr&ments.technical and mana#erial! pre%enti%e

and s&per%isory! e%asi%e and reacti%e!etc'0 that "ere implemented! or plannedto $e implemented! in compliance "iththe Risk Mana#ement ?lan! in order to

%erify its e3ciency and eecti%eness'• The checkin# and s&per%ision res&lts

m&st $e doc&mented! e%al&ated andrecorded'


38/41

*'6 ?rocess re%ie"

• Risk Mana#ement is a dynamic process andtherefore it m&st $e re%ie"ed in a s&3cientlyfre2&ent manner .Risk Mana#ement Re%ie"0!$ased &pon the e(perience #athered in a direct

manner ."ithin the or#anisation0 or indirectly.o&tside of the or#anisation! in similar andcompara$le sit&ations0!


39/41

*'6 ?rocess re%ie" *

"ith the p&rpose of,

•9e%al&atin# possi$le e%ol&tions that concern anyphase of the process! "hich co&ld ca&se chan#es to

the risk prole! matri( and/or treatment .fore(ample! $&t not only, a dierent risk conte(t! adierent criterion re#ardin# the accepta$le risk! adierent costB$enet analysis! etc'0;

•9e%al&atin# the e3ciency and eecti%eness of the

adopted Risk Mana#ement ?lan ; e%al&atin# thecheckin# and s&per%isin# res&lts

+


40/41

*'6 ?rocess re%ie" +

• If re%isions are made! another RiskMana#ement Report m&st $ecreated that is &pdated "ith

re#ard to the chan#es that "eremade'

4:


41/41

8pplica$le Control

Companies ha%e controlled many of risk conditionsin &ncoordinated and "ith little a"areness $eca&se

the main o$ecti%e has $een the reco%ery ofdama#e rather than mana#in# the ca&ses' Thiscontrol is normally carried o&t $y professionalpeople that $elon# to the or#ani)ation,

•in operati%e positions .e'#', technical mana#er!

sales mana#er! marketin# mana#er! administrati%emana#er ! h&man reso&rces mana#er0

•in sta positions .e'#', 2&ality mana#er! safetymana#er! en%ironmental mana#er0!

•in cons&ltancy relationships "ith the or#ani)ationitself .for e(', chartered acco&ntant! ins&rance$roker! le#al co&ncil0'

Date post:	07-Aug-2018
Category:	Documents
Upload:	mukti-utama
View:	215 times
Download:	0 times

Up Load Risk Management

Documents