ENTERPRISE RISK

MANAGEMENT.
 Possible Risks Facing a Bank
Types of Possible risk events

Risk
External Risk Environ - Compliance contamination employment theft
and public health
- ment
Country Civil disorders, economic shock,
expropriation, natural disasters.

Fiscal Changes of government ,corporate/sales tax

rate changes

Government Consumer demand, effect of Government

changes, inflation ,anti-business ethos.
Types of Possible risk events
Risk

Litigation Product liability,safety,side effects

Regulatory Capital adequacy, competition policy, tariff

barriers, theft

Security Intellectual property theft, sabotage, physical

property theft.
 Fund Possible risk events
Manageme-
nt Risk
Dealing Market information, inappropriate internal
information, market collapse.

Process Collusion, dealing error, fraud, input/output error

-ing
Financial regulation, Legal issues, taxation treties.
Statutory
Documentation, execution accuracy, settlement,
Trading valuation methodology .
Infrastruct Possible risk events
-ure Risk

Human Lack of staff, quality of staff, strike action,

Resource lack of training, succession planning
Organizational Objectives, policies, alliances, market image,
authority limits, audit ,sales force profile.

Planning Accuracy of situation appraisal, incorrect

budgeting, poor quality of data, forecasting
inaccuracies

Reporting Accounting policies, data flow, complex

management policy

Systems Inadequate performance, alignment to business

strategy, availability of systems, data integrity,
disaster planning, programming quality,
network security, telecommunications, verified
algorithms
Liquidity Possible risk events
Risk

Cash flow Business interruption, customer confidence,

forecasting quality, access to finance.

Default (credit) risk, financial performance of

Counter party counterparty, credit rating, bank confidence,
liquidity, supplier confidence

Rating Market confidence, shareholder risk

Operation- Possible risk events
al Risk

Logistics Delivery mechanism, global distribution,

handling of shortages.

Procurement Alternative source identification, quality of

part, stock exchanges, supplier profile.

Production Cost, make versus buy, process problems,

quality reviews, technology.
 Position Possible risk events
(market)
Risk

Currency Non-convertibility of currency, economic factors,

transaction risk, translation risk, mismatches,
volatility.

Interest Basis risk, parallel yield curve shifts, twists in

Rate yield curve, incorrect day count basis.
Propositio Possible risk events
-n Risk

Competitive Competitor product action, inferior product,

product imitation, patent expiry.

Economic Client pricing, competitor pricing, market

share, market dvelopments,product expiry.

Strategy Business portfolio, communication, reputation,

lack of competitor knowledge, research focus,
initial pricing .
NAME OF MEMBERS
FEHMIDA SHAIKH

PRAKASH KAMBLE
THANK YOU