Opportunity loss and PS7/13: Difference between pages

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1.  ''Hedging - regret risk.''
''Banking.''  


The worsening of a financial position when effectively 'locked in' to a course of action or to a particular fixed price or rate, compared with the alternative which could have been followed without the lock-in.
The UK Prudential Regulatory Authority's Policy Statement 7 of 2013.


For example, there is always a risk of opportunity losses when using a fixing instrument to effectively lock in a (committed) price.
PS7/13 sets out the related rules and supervisory statements to implement the EU's CRD IV in the UK.
 
We are effectively locked in to the predetermined and committed price, instead of being free to take advantage of actual market rates (if they turn out to be more favourable).
 
 
This type of loss is also sometimes known as an 'opportunity cost'.
 
 
2.  ''Operational and other contexts.''
 
Any loss resulting from a failure to take advantage of an opportunity.
 
This type of opportunity loss can result from analysis paralysis, other factors, or both.




== See also ==
== See also ==
* [[Analysis paralysis]]
* [[AT1]]
* [[Fixing instrument]]
* [[Basel II]]
* [[Opportunity cost]]
* [[Basel III]]
* [[Opportunity risk]]
* [[Capital adequacy]]
* [[Regret risk]]
* [[Capital Requirements Directive]]
* [[Common Equity Tier 1]]  (CET1)
* [[CRD IV]]
* [[Prudential Regulation Authority]]
* [[T2]]


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

Revision as of 17:40, 25 June 2022

Banking.

The UK Prudential Regulatory Authority's Policy Statement 7 of 2013.

PS7/13 sets out the related rules and supervisory statements to implement the EU's CRD IV in the UK.


See also

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