Non-financial risk and Principal: Difference between pages

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''Risk management - banking - financial firms.''
#In agency law, an individual or other legal person represented by an agent.
#In law, a legal person acting on their own behalf.
#The amount of an investment or a loan, excluding any interest. When the whole of a loan is drawn down at the start, the principal is simply the amount originally borrowed.
#The reference amount of a traded financial instrument, used to determine its future cashflows.
#Most important, or largest.  


(NFR).


Non-financial risks are all risks that are not financial risks.
The concepts of 'principal' above, should not be confused with ''principle'', which is different.
 
The concept is particularly important for banks and other financial firms where, historically, the management of non-financial risks may in some cases have been neglected.
 
 
:<span style="color:#4B0082">'''''Only a downside'''''</span>
 
:"Non-financial risk, whether related to misconduct, non-compliance, IT, reputational, cybersecurity or operational challenges, is not linked directly to financial decisions and has only a downside.
 
:In other words, unlike credit or market risk, here there are only potential losses, which can be large. In addition, non-financial risk can only be reduced or mitigated, but not eliminated, and it is far more difficult to quantify than financial risks.
 
:Despite all these difficulties, or perhaps because of them, non-financial risk has been on [bank] regulators’ and supervisors’ radar for quite some time. In fact, it’s been more than 15 years since the Basel II capital accord included a capital charge for operational risk."
 
:''Margarita Delgado, Deputy Governor, Banco de Espana, 2019''




== See also ==
== See also ==
* [[Compliance risk]]
* [[Acceleration]]
* [[Conduct risk]]
* [[Agency]]
* [[Credit risk]]
* [[Agent]]
* [[Cyberrisk]]
* [[Arm’s length principle]]
* [[Downside risk]]
* [[Coupon rate]]
* [[Financial risk]]
* [[Dual currency bond]]
* [[Guide to risk management]]
* [[Endowment]]
* [[Market risk]]
* [[Foreign currency bond]]
* [[Operational risk]]
* [[Forward forward contract]]
* [[Regulatory risk]]
* [[Interest]]
* [[Reputational risk]]
* [[Non-performing loan]]
* [[Risk]]
* [[Paying agent]]
* [[Risk management]]
* [[Point]]
* [[Risk mitigation]]
* [[Self-financing loan]]
* [[Systemic risk]]
* [[Separate personality principle]]
 
* [[Annuity factor]]
[[Category:Accounting,_tax_and_regulation]]
* [[Instalment]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]

Revision as of 05:53, 22 August 2017

  1. In agency law, an individual or other legal person represented by an agent.
  2. In law, a legal person acting on their own behalf.
  3. The amount of an investment or a loan, excluding any interest. When the whole of a loan is drawn down at the start, the principal is simply the amount originally borrowed.
  4. The reference amount of a traded financial instrument, used to determine its future cashflows.
  5. Most important, or largest.


The concepts of 'principal' above, should not be confused with principle, which is different.


See also

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