handout01_econprin

handout01_econprin - Outline Introduction Market risk...

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Unformatted text preview: Outline Introduction Market risk Credit risk Operational risk Challenges Economic Principles of Risk Management Haipeng Xing Haipeng Xing AMS517, SUNY Stony Brook Economic Principles of Risk Management Outline Introduction Market risk Credit risk Operational risk Challenges Outline 1 Introduction to risk management 2 Economic principles of market risk 3 Economic principles of credit risk 4 Operational risk 5 Challenges in financial risk management Haipeng Xing AMS517, SUNY Stony Brook Economic Principles of Risk Management Outline Introduction Market risk Credit risk Operational risk Challenges Introduction to risk management Market risk is the risk of a change in the vlaue of a financial position due to changes in the value of the underlying components on which that position depends. Credit risk is the risk of not receiving promised repayments on outstanding investiments such as loans and bonds, because of the default of the borrower. Operational risk is the risk of losses due to inqdeauate or failed internal processes, people and systems, or from external events. Haipeng Xing AMS517, SUNY Stony Brook Economic Principles of Risk Management Outline Introduction Market risk Credit risk Operational risk Challenges Economic principles of market risk I Market risk management is not for the purpose of protecting shareholder equity value from the losses represented directly by changes in market prices, but is rather for the purpose of reducing the frictional costs that are sometime associates with changes in market....
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handout01_econprin - Outline Introduction Market risk...

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