Index

Average assumptions,46

Blockbuster Video,12

Business reporting structure,24

Capital planning,87–88

Coca Cola,12

Contingency funding arrangements,89

Control and risk self-assessment,19

Credit insurance,93

Credit risk,6–7,50,92

management of,6–7,91–93

considerations,91

credit assessment,91

credit insurance,93

credit rating, considering,91

services can be outsourced,92

measuring,6

occurrence of,6

Currency risk,7

Direct costs,36

Enterprise risk management,16

credit risk,6–7

importance of,16

key building blocks,15–21

key risk analysis,95

liquidity risk,8–10

market risk,7–8

operational risk,10–12

reporting system, designing,96

reputational risk,13–14

role of,5–14

strategic risk,12–13

Indirect costs,36

Inherent risk,11,65

Internal audit,56,57

Internal loss data,67–72

direct and indirect costs,69

expected loss,68

loss distribution,69–70

role of,67

suitable confidence level, selecting,72

types of,67

unexpected loss,68

International Petroleum Exchange (IPE),7

Invoice discounting,88

Invoice factoring,88

Key control indicators,20

Key performance indicators,20

Key risk indicators,19–20,66

Lines of defense model,55–57

first,56

second,56

third,57

Liquidity risk,8–10,24–25,50,85–90

cash flow implications,87

companies have excess funds,89

fund for companies,9,85

fund management,90

management of,10,86–87

portfolio management approach,87

understanding cashflows,10

London Metals Exchange (LME),7

Market risk,7–8,24

currency risk,7

in equities and bonds,8

judgement of,8

Matrix management structure,25–26

Maximum potential loss (MPL),37,65

New York Stock Exchange (NYSE),8

Operational risk,10–12,50

effective implementation of controls,11

management of,11

residual risk,11

Reputational risk,13–14

Residual risk,11,65

Risk

acceptance policies,96

appetite,18

assessment,2

concept of,1–3

consistency,20–21

credit,6–7

currency,7

distribution of,35

identification,19

indicators,19–20

inherent,11

level of,1

liquidity,8–10

market,7–8

operational,10–12

register,19

reputational,13–14

residual,11

role in business,2–3

self-assessment,19

strategic,12–13

tolerance,18

Risk and control self-assessment (RCSA),19,73–77

challenges of,74

credit risk mitigation,75

external audit,76

initial analysis,74

internal audit, role of,76

level of risk, assessing,75

objectives of,73

senior management, involvement of,77

Risk appetite,18,41–47,96

cascading,46

definition of,41–42

modelling of,46

unacceptable level of loss,42

unitary,46

Risk consistency,20–21

Risk governance,23–28

business reporting structure,24

matrix management structure,25–26

risk management function,26

Risk identification,19,31

Risk management,23,96

budgeting for loss,30

business reporting structure,24

embedding in business,29–33,35

framework, implementing,59

function,17,26

implementing good techniques,29

level of research,32

line of defense,30

matrix management structure,25–26

structure of,56

Risk metrics,63–66

information on risk,64

inherent risk assessment,65

level of risk, understanding,63–64

series of classes,63

Risk quantification,35–39

Risk register,19,31,63

developing,51

elements of risk,49–50

governance grouping,50

introduction to,49–51

objectives of,49

structure of,52–53

unitary risk appetite, developing,51–52

Risk tolerance,18

Risk training,59–61

depth of,61

outsourced suppliers and contractors, issue of,60

practical and relevant,60

Scenario modelling,21

Senior management

confidence levels, understanding,17

engaging with,16–18

support,15–16

Sensitivity analysis,21,80

Strategic risk,12–13

Stress testing,21,79–84

bonus issue,82

external loss database,81–82

key variables,79

scenario analysis, problem with,84

scenario data, sources for,81

sensitivity analysis,80

Taxation,86

Unitary risk appetite,46

Value at Risk,71,72

Wiley Finance,72

Zone of Tolerance,43