A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Types of Risk

Compliance Risk
Compliance Risk

Compliance risk is exposure to legal penalties, financial forfeiture and material loss an organization faces when it fails to act in accordance with industry laws and regulations, internal policies or prescribed best practices.

Concentration Risk
Concentration Risk

Concentration risk is a banking term denoting the overall spread of a bank's outstanding accounts over the number or variety of debtors to whom the bank has lent money. This risk is calculated using a "concentration ratio" which explains what percentage of the outstanding accounts each bank loan represents.

Credit Risk
Credit Risk

Credit risk is the probable risk of loss resulting from a borrower's failure to repay a loan or meet contractual obligations. Traditionally, it refers to the risk that a lender may not receive the owed principal and interest, which results in an interruption of cash flows and increased costs for collection.

Financial Risk
Financial Risk

Financial risk is the possibility that shareholders or other financial stakeholders will lose money when they invest in a company that has debt if the company's cash flow proves inadequate to meet its financial obligations.

Horizon Risk
Horizon Risk

Identify reduction opportunities to generate cost savings and to strengthen existing risk mitigations. Where is my money best spent? Develop an action plan a the basis for building improved resilience. What do I need to report? Track progress, review and report to stakeholders (internal and external), using infographics to bring the outputs to life.

Inflation Risk
Inflation Risk

BREAKING DOWN 'Inflationary Risk' Inflationary risk refers to the the risk that inflation will undermine the performance of an investment. Looking at results without taking into account inflation is the nominal return. The value an investor should worry about is the purchasing power, referred to as the real return.

Liquidity Risk
Liquidity Risk

Liquidity risk is the risk that stems from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss. Liquidity risk is typically reflected in unusually wide bid-ask spreads or large price movements.

Longevity Risk
Longevity Risk

Longevity risk is risk to which a pension fund or life insurance company could be exposed as a result of higher-than-expected payout ratios. Longevity risk exists due to the increasing life expectancy trends among policyholders and pensioners, and can result in payout levels that are higher than what a company or fund originally accounts for.

Market Risk
Market Risk

Market risk is the possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets. Market risk is the possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets.

Operational Risk
Operational Risk

Operational risk summarizes the risks a company undertakes when it attempts to operate within a given field or industry. Operational risk is the risk not inherent in financial, systematic or market-wide risk.

Operational Risks
Operational Risks

Operational risk is the risk not inherent in financial, systematic or market-wide risk. It is the risk remaining after determining financing and systematic risk, and includes risks resulting from breakdowns in internal procedures, people and systems.

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Other Risks
Other Risks

Risk: A state of uncertainty where some of the possibilities involve a loss, catastrophe, or other undesirable outcome. Measurement of risk: A set of possibilities each with quantified probabilities and quantified losses.

Reinvestment Risk
Reinvestment Risk

Reinvestment risk is more likely when interest rates are declining. Reinvestment risk affects the yield-to-maturity of a bond, which is calculated on the premise that all future coupon payments will be reinvested at the interest rate in effect when the bond was first purchased.

Reputational Risk
Reputational Risk

Reputational risk is a threat or danger to the good name or standing of a business or entity. Reputational risk can occur through a number of ways: directly as the result of the actions of the company itself; indirectly due to the actions of an employee or employees; or tangentially through other peripheral parties, such as joint venture partners or suppliers.

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Strategic Risk
Strategic Risk

strategic risk. A possible source of loss that might arise from the pursuit of an unsuccessful business plan. For example, strategic risk might arise from making poor business decisions, from the substandard execution of decisions, from inadequate resource allocation, or from a failure to respond well to changes in the business environment.