risk management

risk management
Controlling the probability, and/or the severity, of a potential adverse event so that the consequences of that event are within acceptable limits. Since all risks have, by definition, the potential to generate losses, and since capital is the ultimate protection against failure resulting from losses, the underlying basis of risk management is equivalent to managing solvency risk. American Banker Glossary
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The process of identifying and evaluating risks and selecting and managing techniques to adapt to risk exposures. Bloomberg Financial Dictionary

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risk management risk management ➔ management

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   Risk management is a 'middle office' function that sits between the dealing room and settlement. It involves revaluing all positions at least daily to estimate the risk of possible future losses on those positions and ensure that they are within acceptable limits.
   ► See also Middle Office, Mark to Market.

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risk management UK US noun [U]
► MANAGEMENT, INSURANCE the activity of calculating and reducing risk, so that an organization does not fail or lose money: »

Companies often overlook fraud in their risk management.

→ Compare RISK ASSESSMENT(Cf. ↑risk assessment)
► FINANCE the activity of calculating and reducing risk in a set of investments, so that investors do not lose money: »

We don't have the right kind of risk management expertise to manage these types of investments.


Financial and business terms. 2012.

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