Risk Management Articles

Latest risk management articles to help you better understand the complex world of Risk management. If you would like to submit your articles of interest, do write to manoj.jain@riskpro.in and we will surely include your articles in this section.


Regulation seen as a big concern for Asset Management Industry

When regulations get complex and ever expanding, then the risk of regulatory compliance takes the Driver's seat. According to research by Ernst & Young, Increased regulatory interest has overtaken reputation as the biggest risk concern for asset management chief risk officers (CROs) with the desire to optimise capital and liquidity springing into third place.

Indian Journey to Basel II

Article on Indian Journey to Basel II attached

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Article Submitted By:
Professor Satchidananda Sogala Ph.D.,
satchidananda.sogala@srichidtechnologies.com
Founder & CEO, Srichid Technologies Private Limited, # 3:2 , First Floor, N R Colony , Bangalore 560019

Impact of Basel 3 on Indian Banks: Need for more capital

One of the most significant impact of Basel II amendments is the material change in the calcualtino of Tier I capital along with defining what is invluded in tier I capital.

In addition to the above, several other changes have been made into basel II, to implment what people call the Basel III. If we were to ahve many more of the 2008 crisis, you can imagine Basel X, the number of banks that would still be in business and the role of Risk Management in the world.

Anyway, below are some of the reasons why Banks might be running around for more capital.

Mis-selling: A significant Operational Risk

It refers to the ethically questionable practice of a salesperson misrepresenting or misleading an investor about the characteristics of a product or service. Mis-selling risks have escaped attention of many institutions due to focus on other initiatives such as Basel II requirements.

Five of the Financial Services Authority’s (FSA) - UK principles of business are relevant in context of mis-selling
1. A firm must conduct its business with integrity
2. A firm must conduct its business with due skill, care and diligence

Regulatory Compliance (XBRL) is always an expensive affair

In the recent newspaper article, it was mentioned that "companies which are converging with the international financial reporting standards (IFRS) from April 1, 2011 will also have to incur an additional cost of complying with the advanced reporting language tool, XBRL (extensible business reporting language)." The XBRL is a way of electronic communication of business and financial data and is of immense utility to the capital markets and the investing community.

Experiences of a Finance Domain Expert

This is a write up of some of the experiences of a finance and risk management expert. Young professionals who are in the finance field can be guided by this experience write up and prepare accordingly.

Summary

Do I need a risk management policy

The answer depends upon one question. Is it regulatory required or not. If yes, then you have no option. If not regulatory required, then it depends upon you.

If you ask Riskpro, it is always a good idea to have an effective risk management structure. For example, recently, State-run National Bank for Agriculture and Rural Development (Nabard) has asked regional rural banks (RRBs), state cooperative banks (SCBs) and district central cooperative banks (DCCBs) to formulate their risk management policy and constitute risk management committee.

Risk Management__Chote ke liye___Bade ke liye_(For the small and the large)

Borrowing the punch line from IDBI Bank, we try to analyse or to make some conclusion as to whether risk is risk management is for the large corporates ONLY or is it also useful and important for the smaller entities. Risk is something broader than most people think. It's not only about financial risks. It's about anything that can affect the running of a company and money is just the way that's was found to quantify this risk.

The Top Ten Risks across the globe

According to the AON survey, the following are the top ten risks that are on the minds of global corporates.

1. Economic slowdown – Undoubtedly, this is one risk that is on everyone’s mind. The business risks emerging from the economic slowdown has such huge impact that there is no room for error.

2. Regulatory/legislative changes – with the governments of all countries trying to battle the slowdown, there are a series of regulatory and legislative changes being made every now. And these are far reaching changes that can upset the best of the risk management initiatives.

New Year Resolution for Risk Management Efforts

If 2008 was the year of corporate fallouts, 2009 was definitely the year of corporate makeover with a strong focus on “Risk management”. This and risk related terms were widely searched for on Google and these words appeared across many business publications and newspapers.

But does talking about risk management actually translate into effective risk management. We believe not, because just like everyone talks about Enterprise Risk Management (ERM), little has been done about it. Even if organisations are working on ERM, there is little progress.

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