3. DEFINITION
Risk management is a logical process or
approach that seeks to eliminate or at least
minimize the level of risk associated with a
business operation.
Essentially, the process identifies any type of
situation that could result in damage to any
resource within the possession of the company,
including personnel , then take steps to correct
those factors that are highly likely to result in
that damage.
5. 1. RISK ASSESSMENT
A risk assessment is simply a careful
examination of what, in your work, could cause
harm to people, so that you can weigh up
whether you have taken enough precautions or
should do more to prevent harm.
It not only helps one to evaluate the risk but also
help in measuring and reviewing the risk.
Assessment of risk identify also the nature of
risk associated.
6. RISK LEVELS
RISK LEVEL
MISSION EFFECTS
Extremely high
Mission failure is hazardous.
High
Degraded mission capabilities.
Moderate
Expected degraded capabilities.
Low
Expected losses have no impact on
mission success.
7. 2. RISK EVALUATION
Once you have identified the threats you face,
the next step is to work out the likelihood of the
threat being realized and to assess its impact.
One approach to this is to make your best
estimate of the probability of the event
occurring, and to multiply this by the amount it
will cost you to set things right if it happens.
This gives you a value for the risk.
8. 3. MANAGING RISK
Once you have worked out the value of risks
you face, you can start to look at ways of
managing them.
When you are doing this, it is important to
choose cost effective approaches - in most
cases, there is no point in spending more to
eliminating a risk than the cost of the event if it
occurs.
9. 4. REVIEWS
Once you have carried out a risk analysis and
management exercise, it may be worth
carrying out regular reviews.
These might involve formal reviews of the risk
analysis, or may involve testing systems and
plans appropriately.
10. RISK MANAGEMENT IN
BANKING
In the course of their operations, banks are
invariably faced with different types of risks
that may have a potentially negative effect on
their business.
Banks are therefore required to form a special
organizational unit in charge of risk
management.
11. RISK MANAGEMENT IN
BANKING
Following are the risks that are faced by the
banks:
1)
2)
3)
4)
5)
Liquidity risk
Credit risk
Market risk
Exposure risk
Investment risk
12. CONCLUSION
We live in a world that is full of risk, large
degree have created ourselves, and where
naturally occurring risk hardly exists anymore.
