Risk Management Policies

Résumé du document

In order, to define the risk management policies and the procedures manual for the trading book, it is necessary to define the financial product of the bank.The bank trades in fixed income money market securities and short to medium term bonds, but also in interest rate and credit derivatives.
The fixed income is bond for less than 1 year.Then the short and medium term, the interest rate and credit derivatives are others products linked to different risk.

Extraits

[...] Risk monitoring: concerning the procedures manual for the trading book save and transfer the data at the right moment to the right person identifying information that belongs on a risk report and inventory of product trade The procedure has to define rules for investing and trading and taking in consideration the strategies for risk. The volatility, the risk/return information, the aggregate market risk have to be define. In order to set up the objectives, manage the risk and measure them to have an accurate view of the trade's positions. [...]

[...] Risk Management Policies What are the high level elements that should be contained in a risk management policies and procedures manual for the trading book? In order, to define the risk management policies and the procedures manual for the trading book, it is necessary to define the financial product of the bank. The bank trades in fixed income money market securities and short to medium term bonds, but also in interest rate and credit derivatives. The fixed income is bond for less than 1 year. [...]

[...] Operational Risk Operational risk is the risk of loss due to some failure in processing transactions. Business/Event Risk: these are the risks common to many businesses which do not form part of the daily operating risks. The risk will be from different nature like: Interest rate risk Yield curve risk Interest rate volatility Interest rate basis risk/spread risk Prepayment risk Liquidity risk The risk's identification benefits : Provide a clan definition of the risk Provide a framework of individuals risk and the impact on the business Allow/enable senior management to asses gaps in risk management responsabilities Risk measurement Risk management analysis has to take in consideration different factors linked to Qualitative approach. [...]