Rank and Risk response: Difference between pages

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imported>Doug Williamson
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1.  ''Credit risk - insolvency.''
A choice in relation to an identified risk which can be categorised broadly as the decision whether to:


Priority ordering of payouts in a insolvency.
# Avoid the risk, or
# Accept it.


Ranking is particularly important when there are insufficient assets to satisfy all claims.


The broad choice to 'accept' a risk can be further classified according to whether the firm then retains, reduces or transfers the risk.


2.  ''Bank regulation - liquidity.''
Using this model, the classes of potential risk responses are therefore four, namely:


The ordering of liquidity quality of assets, for regulatory liquidity quality.
# Avoid
# Accept and retain
# Accept and reduce, or
# Accept and transfer.




3.  ''Other evaluations.''
==See also==
* [[MCT]]
* [[Risk assessment]]
* [[Risk evaluation]]
* [[Risk identification]]
* [[Risk management]]
* [[Risk reporting]]
* [[Transfer]]
* [[Guide to risk management]]


Any other systematic ordering by quality or importance.
[[Category:Financial_risk_management]]
 
 
== See also ==
* [[Credit rating]]
* [[Credit risk]]
* [[Insolvency]]
* [[Obligation]]
* [[Pari passu]]
* [[Pari passu clause]]
* [[Seniority]]
* [[Subordination]]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Revision as of 15:38, 30 May 2016

A choice in relation to an identified risk which can be categorised broadly as the decision whether to:

  1. Avoid the risk, or
  2. Accept it.


The broad choice to 'accept' a risk can be further classified according to whether the firm then retains, reduces or transfers the risk.

Using this model, the classes of potential risk responses are therefore four, namely:

  1. Avoid
  2. Accept and retain
  3. Accept and reduce, or
  4. Accept and transfer.


See also