risk management
TRANSCRIPT
RISK MANAGEMEN
TTunahan BAYIR
In this presentation we will handle...
Definition Of Risk Understanding And Analysing Risk Definition Of Risk Management Risk Management Planning, Tools And
Techniques Examples Of Poor Risk Management
DEFINITION OF ‘RISK’
The chance that an investment’s actual return will be different than expected.
DEFINITION OF ‘RISK’
DEFINITION OF ‘RISK’
Cumulative effect of the probability of uncertain occurrences that may positively or negatively affect project objectives.
UNDERSTANDING AND ANALYSING RISK
The nature of any given risk is composed of three fundamental elements:
The Event
The Probability
The Severity (or impact)
UNDERSTANDING AND ANALYSING RISK
UNDERSTANDING AND ANALYSING RISK
Example
Building a house?
Going Alaska?
UNDERSTANDING AND ANALYSING RISK
Risk Attitudes And Appetites
Classifying Risk
Risk Breakdown Structure
Risk Taxonomy
Risk Facets
DEFINITION OF RISK MANAGEMENT
The process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making.
RISK MANAGEMENT PLANNING, TOOLS AND TECHNIQUES
Financial Risk Managemenet: Financial risk is the loss of key resources like funding, etc. In this case the company will not have adequate cash flow to meet financial obligations. Credit risk, liquidity risk, market risk, operational risk are different types of financial risks.
Credit and Investment Risk Management: When the borrower becomes default and was unable to make payments as promised it is said to be Credit risk, also called default risk. Investment risk was associated with this where the investor losses his principal and interest too.
RISK MANAGEMENT PLANNING, TOOLS AND TECHNIQUES
Liquidity Risk Management: Sometimes due to lack of liquidity in the market an asset cannot be sold to make the profit or to prevent a loss this is what called as Liquidity risk.
Market Risk Management: Due to the change in value of the market risk factors value of investment portfolio or the value of a trading portfolio will decrease. Foreign exchange rates, stock prices, interest rates, and commodity prices are the standard Market risk factors.
RISK MANAGEMENT PLANNING, TOOLS AND TECHNIQUES
Operational Risk Management: A risk arising from execution of an organisation's business functions is Operational risk. Risks arising from the people, systems and processes through which an organisation operates. Fraud risks, legal risks, physical or environmental risks are other categories included under this.
Process Risk Management: Risky business processes that could lead to project failure are Process risks.
Intangible Risk Management: Those risks that are often associated with damage to the reputation of an organisation or its brand are Intangible risks.
RISK MANAGEMENT PLANNING, TOOLS AND TECHNIQUES
Time Risk Management: Risks which often involve things connected to time are Time risks.
Human Risk Management: Loss of critical employees or knowledge which are connected to man power are Human risks.
Legal Risk Management: Losses include government regulations and the same having an impact on the operations of the company are Legal Risks.
Physical Risk Management: Physical risks are those loses of physical resources such as equipment, buildings, land, etc due to natural disasters or man made.
EXAMPLES OF POOR RISK MANAGEMENT
Panama Canal
Yucca Mountain
Bank Of America
EXAMPLES OF POOR RISK MANAGEMENT
Panama Canal
EXAMPLES OF POOR RISK MANAGEMENT
Panama Canal
In 1880s french businessman Ferdinand de Lesseps charged forward the canal project without any risk magamenet or even blueprints.
Workers piled dirt on each side of the excavation site which caused the muddy landscape.
By 1884 each day approximately 200 workers lost their lives to the contagious diseases.
EXAMPLES OF POOR RISK MANAGEMENT
Yucca Mountain
EXAMPLES OF POOR RISK MANAGEMENT
Yucca Mountain
In 1987 U.S. Government decided using Yucca Mountain (in Nevada) as nuclear waste depository.
Government of U.S. not account for protest and opposition from Nevadans and angered them for years.
They spend a little over $13 billion of taxpayer money on the project.
EXAMPLES OF POOR RISK MANAGEMENT
Bank Of America
EXAMPLES OF POOR RISK MANAGEMENT
Bank Of America
In 2012 they begin to charge customesrs $5 per month just to gain access to their funds, debit cards.
Customers dumped the bank and Bank Of America decide not to take the $5 charge but it was too late.
SUMMARY
As a result,
Do the risk managemenet before start a project or make a move
Think about everything is possible (be paranoid)
Any questions?
Thanks for listening