Risk Management - Part 2
This eCourse consists of two modules on Market Risk. Market risk is the risk that the value of an institution’s positions may rise/fall due to changes in the market value of financial instruments. This may take the form of gains/losses arising from traded or non-traded positions. There are many influences on market positions, but the key drivers are interest rates, equity prices, foreign exchange rates, and commodity prices.
Module 1 addresses some key issues associated with market risk in banking institutions: Where does it come from? How can it be measured? What are the difficulties associated with such measurements? A subsequent tutorial will look at how market risk can be managed and the regulatory context associated with this form of risk.
Module 2 moves beyond the identification and measurement of market risk to look at the structures banks put in place to manage market risk. The module also examines how regulators are continuously attempting to ensure that banks hold sufficient capital to cover market risk, while also looking at other regulations that can help to rein in the excessive risk-taking that is perceived to have played a major role in the financial crisis.
On completion of this course, you will be able to:
- Identify the typical sources of market risk for a financial institution
- Describe the different types of measurement used for the various forms of market risk
- Outline, for a typical institution, how market risk management is organized
- Describe the market risk regulatory context in which banks operate
Module 1: Market Risk - Identification & Measurement
Topic 1: Identifying Market Risk
Topic 2: Measuring Market Risk
Module 2: Market Risk - Management & Regulation
Topic 1: Managing Market Risk
Topic 2: Market Risk & Regulation