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It is often said that the benefits of Risk Management are intangible. No argument here. It's tough to say "You were successful because I helped you manage your risk" when you are talking to an already successful CEO. How then do you demonstrate the benefits of Risk Management?

One approach is around the concept of Intellectual Capital. When we talk about the value of a business, we talk about book value and market value. The difference between book and market value is often described as the intan

A recent debate on the ISO 31000 Linked in forum about time and risk poses the following question "Is delaying a risk considered a separate treatment method or is it just a sub-type of changing the likelihood?"

Maturity across the Counterparty Credit Risk (CCR) and Credit Valuation Adjustments (CVA) space varies greatly across the industry. Our recent survey provided some interesting insights as to whether banks are ready for CCR and CVA under Basel III, thanks to detailed responses from our clients and academic participants.

We found that there are clear differences of opinion between academics and practitioners particularly when it comes to Basel III readiness for CCR. The same is reflected with rega

Concentration risk is the "spread" of outstanding obligors or specifically the level of diversity that exists across a bank's loan portfolios. The lower the diversity, the higher the credit concentration risk.

In this blog post we look at the stress testing aspects around concentration risk and a presentation has also been attached to this journal which can be downloaded.

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In general only a handful of businesses correctly capture Operational Risk Loss Data and of those that do, only a small number of risk units in these firms are modelling their risk data in a coherent manner. After a bit of research on the internet and in various other channels, it has become relatively apparent that there isn't a comprehensive list of potential models which can be uses for understanding Operational Risk. I would have expected an analyst somewhere at some point in time to have do

 
One approach for embedding a risk management culture across your enterprise is to develop a team of risk champions within your business. What should you expect of them and how should you equip them?

The answers to these questions are not straight forward. When you are dealing with cultural change the strategies that work best will depend on a myriad of elements that have occurred or will be occurring in your organisation. Here are some practical questions to ask yourself that will help you to d

Building a loss reporting database for operational risk. What you need & links to some outstanding risk systems.

In our last blog posting on Monte Carlo and Loss Data we described the importance of the Loss Data exercise. A few people have personally emailed me asking for more information on this aspect of risk management, so I have decided to write a blog post on it.

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A presentation on ISO 31000 for banks.

A presentation that looks at ISO 31000 in the banking domain. Why ISO 31000 is compatible with Basel, why ISO 31000 can value-add a Basel risk framework.

The presentation attached to this [ link ] will be delivered at the ISO 31000 conference in Paris on 21st and 22nd of May 2012.

Here’s a common Project Manager story:
You, the Project Manager is creating the budget for your project. Your high level WBS (Work Breakdown Structure) is ready and you have the high level estimates needed for a budget baseline.
As a smart Project Manager, you will add a contingency (20-25%, which is common practice nowadays) to account for unknown events that may add to your cost. In that way, you save your project from going over budget. So far so good.

It seems like you have done your due dili

Rescorla, Boisjoly and LeMessurier - These names may not be familiar to you, however they all have a prominent position in James Chiles book "Inviting Disaster".

Rescorla was the head of security at Morgan Stanley in the South Tower of the World Trade Centre at the time of the 9/11 terrorist attack. After the bombing of the underground car park of the World Trade Centre in 1993, he warned the firm of a possible terrorist attack from the air and that the firm should consider moving to another buil

By looking at a case study in Monte Carlo and Loss Data, we are able to see how important it is to model loss experience and to categorise operational risk loss events.

Recently I had a discussion on modelling risk with a fantastic and successful business person who said to me : "I have read about Monte Carlo, you even make mention to it on your blog but it doesn't make great sense to me. The maths in Monte Carlo is even worse because it seems to confuse the concept by taking it into an academic

Managing a profitable balance sheet is more challenging than ever. With Basel III and the more immediate Dodd-Frank regulation on the horizon, a tool such as FTP is vital to ensure an effective centrally managed liquidity strategy. Post-crisis, whilst the economic situation is improving, allocating sufficient liquidity costs quickly and efficiently to the correct business-line is paramount.

Karin Bergeron is a trader on the CVA desk at Scotiabank. She is responsible for pricing and hedging CVA as

Project change management involves new IT systems, new products, and new markets, or reacting to a change in the business environment, such as regulatory or competitive actions. Project risk management is about identifying new risks or changes in the threat level of existing business processes. The challenge for project managers is how to get teams, functional areas, business processes, systems, and vendors aligned to new goals; moreover, how to get the needed transparency into the activities th

This white paper presents a low risk, high impact approach to gaining control of regulatory compliance. The procedures, tasks, and behaviors that bear upon compliance can be overwhelming. Yet organizations that can master these activities, operate more efficiently, compete more effectively, and build their brands. Learn how Governance, Risk, and Compliance technologies can help.

Learn more: ===⇒ http://bit.ly/EffectiveGrc

Managing a profitable balance sheet is more challenging than ever. With Basel III and the more immediate Dodd-Frank regulation on the horizon, a tool such as FTP is vital to ensure an effective centrally managed liquidity strategy. Post-crisis, whilst the economic situation is improving, allocating sufficient liquidity costs quickly and efficiently to the correct business-line is paramount.

Kent Westerbeck formed the Westerbeck Risk Management consulting company in 2007 after retiring from LaSall

Although most organizations are taking stronger measures to protect their data, significant gaps still exist at the very core - their databases. Many don't have a comprehensive database security strategy to defend against sophisticated attacks, track sensitive data, or even meet emerging regulatory requirements.

In addition, organizations tend to focus on detective controls rather than preventive measures when it comes to database security.

By contrast, Forrester finds that by implementing a c

One of the most important measures of a firm's performance is its return on assets. This is such a critical metric for businesses, that whole schools of thought have been created around the metric to allow a business to easily control and smooth its working capital costs.

There are actually three recognised models that are at the heart of a cash management exercise and they are loosely referenced as Miller-Orr, The Baumol Model and Stone. They are of course very similar in nature and nothing is u

Risk and Issue are two words that are often confused when it comes to their usage. Actually there is some difference between them. The word ‘risk’ is used in the sense of ‘chance’. On the other hand, the word ‘issue’ is used in the sense of ‘matter’.

Uh-Oh!  This is a show-stopper.  We can’t complete the project on time because the server needed won’t be available for another month! What can we do now?

This is not a new problem for Project Managers to have encountered. Is this a risk or an issue? 

Following the recent launch of Strategy & Risk Studio, Manigent have released a lite version of the application to allow users to download the product free of charge! 

Strategy & Risk Studio is a one-of-a-kind application enabling consultants and practitioners to design and define an organisation’s enterprise performance management, enterprise risk management and/or strategy and risk management models. The tool is based on the Risk-Based Performance Management approach, which integrates best prac