Lapses in risk control often lead to substantial financial losses by a company. Long Term Capital Management, Barings, Morgan Grenfell Asset Management, Daiwa and Sumitomo Corporation are household names because they lost huge amounts of money as a result of failures in their control systems. A break-down in risk control eventually costs the shareholder money, directly or indirectly, either by being forced to inject more capital or by seeing the equity lose value when losses resulting from risk control failures become public knowledge. How a company's board and senior management manage and control risk is thus key to success. As more companies implement risk management methods and teams, it becomes increasingly clear that corporations and banks must have a firm grip on risk control. This is a simplified and much shorter version of the authors' very successful Risk Management. There is a focus on concrete results oriented tips and analysis, while covering the entire field of risk management: policies, methodologies, hedging strategies (including derivatives, credit risk, and securitization), and technology infrastructure.
Key topics include: Integrated risk management: how to understand and develop the tools for measuring and managing all the firm's risk; Regulatory environment: G-30 policy recommendations, BIS 1998, and internal models in lieu of the standards of the Basle Accords; Practical measurement issues including various models to measure volatility and summaries of measuring correlations and the yield curve; The Essentials of Risk Management is a book for the non-risk professional. The authors will use very minimal math (most equations will be in the appendix) and they will also be describing key risk concepts in layperson's terms and in great detail. This book is for people who need to know what risk management is, why it's important, and how it is being implemented in companies and banks all over the world