Conservative
From ACT Wiki
Risk appetite and risk budgeting.
Conservative financial and operational strategies are those in which only the lowest levels of risk are acceptable.
Examples include:
- Lending only to the very strongest credits, with substantial collateral.
- Using very little debt, or no debt, in the corporate capital structure.
- Maintaining large reserves and large amounts of high quality liquid assets.
- Hedging a high proportion of, or all, material financial risks.
Also known as 'prudent'.
See also
- Aggressive
- Collateral
- Guide to risk management
- Enterprise risk management
- Hedging
- Prudence
- Reserves
- Rewarded risk
- Risk appetite
- Risk averse
- Risk budget
- Risk management
- Guide to risk management
- Optimal capital structure
- Risk policy
- Risk register
- Risk tolerance
Other links
Risk appetite and risk tolerance: Practical guidance, www.theirm.org
