Readers will gain a good understanding of the different financial risks, the various measurement tools currently available, and will learn to construct a practical risk process that is consistent with corporate strategy. Great emphasis is placed on the shortcomings of such a process and the need to learn from historical failures. Through this work, Banks and Dunn hope to stimulate ideas and provide a basis for further dialogue on effective financial risk management.
The risk management lessons and experience which the two authors share in the book is relevant for a broad range of participants from Board members, CEOs, CFOs, senior management, regulators, auditors, financial analysts, academics and shareholders of large, medium size and small financial institutions, investment funds, smaller companies and non–financial organisations. As financial risks have no boundaries, Practical Risk Management will also appeal to executives around the world.
The book, written in a clear, fast–paced and easily–digestible style, is an invaluable resource for all those who want to learn from, and avoid the repetitions of, the frequent financial disasters that abound without getting caught up in jargon, impractical theory, mathematics and formulae.
Introduction: Financial Risks and Avalanches.
PART I: DEFINING AND MEASURING RISKS.
1. Losses: One–Hundred–Year Floods that Happen Every Three Years.
2. The Basics: A Common Understanding of the Risks.
3. Liquidity: The Heart of the Matter.
4. Suitability: Coping with Customers.
5. Process Risks: The Next Frontier.
6. Measurement: Quantifying the Risks.
PART II: DEVELOPING A HOLISTIC APPROACH TO RISK MANAGEMENT.
7. The Risk Management Process: Building the Foundation.
8. The Financial Risk Mandate: Developing a Philosophy and Loss Tolerance.
9. Risk Principles: Creating a Code of Conduct.
10. Financial Governance: Assigning Accountability for Risk.
11. The Risk Framework: Limiting and Controlling Risks.
12. Automated Management: Automating Discipline on the Front Lines.
13. Manual Management: Enhancing the Automated Discipline.
14. Nuts and Bolts: Supporting the Process with Essential Tools.
15. Ongoing Diagnostics and Transparency: Knowing if the Risk Process is Working.
Conclusion: Can there be Heroes?