Conservative

Risk appetite.

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
• Hedging
• Reserves
• Rewarded risk
• Risk appetite
• Risk averse
• 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