Risk Mgmt

Expected Loss (EL) Calculation

Lending institutions need to understand the loss that can be incurred as a result of lending to a company that may default; this is known as expected loss (EL).  EL can be expressed as a simple formula: EL = PD…

Project Risk Management

The sense of urgency for Project Risk Management Are you satisfied with the performance of your programs or projects? Do you realize your business case on time, within budget and right quality? Do you want more project control and fewer…

Operational Risk Management – Key Concepts

Operational Risk Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk (BCBS). Operational risk is…

What is Risk Management?

Risk: Why Manage It? If you look up the synonyms for the word “risk” you will likely receive results such as: danger, hazard, threat, peril, and gamble. So, why do people, companies, governments, and countries expose themselves to risk? The…

Black Swans Volitality and Flexibility

By: Geary Sikich We live in a volatile world full of uncertainty. It’s all about targeted flexibility, the art of being prepared, rather than preparing for specific events. Being able to respond rather than being able to forecast, facilitates the…

Still Using Spreadsheets to Manage Risks

By: Christina Duren Managing risk is essential in every organization to accomplish its key objectives effectively. Risk management not only requires a reliable process to capture risks, but also needs a mechanism to document and administer the organization’s response. Spreadsheets…

Black Swans Grey Swans White Swans Vigilance

By: Geary Sikich We hear a lot about things that are being called “Black Swans” today thanks to Nassim Taleb and his extremely successful book, “The Black Swan: The Impact of the Highly Improbable,” now in its second edition. I…

Model Risk – Key Concepts

A model is “a quantitative method, system, or approach that applies statistical, economic, financial, or mathematical theories, techniques, and assumptions to process input data into quantitative estimates.” Model risk is the risk associated with using financial models that are inherently…