Rate regulation and Risk management: Difference between pages

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Rate regulation is a framework for establishing the prices that can be charged to customers for goods and services.  
Risk management is about understanding what business and financial risks the company is exposed to and considering whether the returns generated are sufficient to justify taking those risks.  


This framework is subject to oversight and/or approval by a rate regulator.
The risks need to be evaluated and assessed so that decisions can be made on whether to retain them, to employ techniques to mitigate or transfer risk. The underlying risks can be managed to limit risk. They can be hedged with counterbalancing exposures often created through the financial markets, or insurance taken out to protect the company’s financial health.


For example, many governments regulate the supply and pricing of particular types of activity by private entities, including utilities such as gas, electricity and water.
 
Risk management includes the management of:
# Business and operational risk
# Commodity risk
# Credit risk
# Exotic risk
# FX risk
# Interest rate risk
# Managing risk
# Pensions risk
 
 
One way of working with risk management is through a framework comprising:
 
- Identification
 
- Assessment
 
- Evaluation
 
- Response and
 
- Reporting




==See also==
==See also==
* [[IFRS 14]]
* [[Asset-liability management]]
* [[Ofwat]]
* [[Black swan]]
* [[Ofgem]]
* [[CertICM]]
* [[Regulation]]
* [[CertRM]]
* [[Regulatory deferral account]]
* [[Corporate treasury]]
* [[Enterprise risk management]]
* [[Hedging]]
* [[KRI]]
* [[Materiality]]
* [[Risk]]
* [[Risk analysis]]
* [[Risk appetite]]
* [[Risk assessment]]
* [[Risk averse]]
* [[Risk evaluation]]
* [[Risk identification]]
* [[Risk register]]
* [[Risk reporting]]
* [[Risk response]]
* [[Treasury]]
* [[Guide to risk management]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Financial_risk_management]]
[[Category:Manage_risks]]

Revision as of 11:07, 29 November 2014

Risk management is about understanding what business and financial risks the company is exposed to and considering whether the returns generated are sufficient to justify taking those risks.

The risks need to be evaluated and assessed so that decisions can be made on whether to retain them, to employ techniques to mitigate or transfer risk. The underlying risks can be managed to limit risk. They can be hedged with counterbalancing exposures often created through the financial markets, or insurance taken out to protect the company’s financial health.


Risk management includes the management of:

  1. Business and operational risk
  2. Commodity risk
  3. Credit risk
  4. Exotic risk
  5. FX risk
  6. Interest rate risk
  7. Managing risk
  8. Pensions risk


One way of working with risk management is through a framework comprising:

- Identification

- Assessment

- Evaluation

- Response and

- Reporting


See also