credit

risk, currency risks and market risks.

operational risks, credits

risks and market risks.

strategic risks, operational

risks and reputational risks.

country risks, credit risks

and strategic risks.

allow

investors to transform current commitments to match changing circumstances and

expectations.

are

used to hedge against operational risk.

are

used to provide leverage or gearing.

best

dealt with through third-party insurance.

best dealt with by

accepting them as an operating expense.

classified as high-frequency/low-severity losses.

ignored in terms of risk control

decision-making. 

hedging

activities.

the decrease in the value of

financial portfolios due to market movements.

fluctuations

in exchange rates.

the

failure of customers to pay back loans.

it

normally boosts the economy.

interest

rates on borrowed funds will be decreased.

the

money supply in the country is reduced.

consumers

will have more money to spend on durables and investments.

best

dealt with by accepting them as an operating expense.

best

dealt with through third-party insurance.

classified

as a low-frequency/high-severity loss.

ignored

in terms of risk control decision-making.

merely

identifies risks at a tactical level

is

primarily a top-down approach to evaluating operational risk.

is used to neutralise some

of the subjectivity of other non-numerical assessment methods.

merely

identifies risks at a macro level. 

appropriate

preventive control measures.

acceptance/tolerance.

strategic

management processes.

insurance

policies.

detective

contingency

reactive

preventive

is

a top-down approach to evaluating operational risk.

is

a quantitative approach to operational risk measurement.

provides

an objective reflection of risk.

is

a bottom-up approach to evaluating operational risk.