From the course: Introduction to Risk Management

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The catalog of risks

The catalog of risks

From the course: Introduction to Risk Management

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The catalog of risks

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- [Instructor] Here is an overview of the different risks a bank or a financial institution could be exposed to. We are going to take some time shortly and explore all of them. As you can see, they can broadly be categorized into two groups, financial risks and non-financial risks. Financial risks are risks that are reflected in the financial statements, usually the balance sheet of a bank. These risks usually arise as a result of their risk-taking activities day to day. Financial risks are market risk, credit risk, counterparty risk, and liquidity risk. Non-financial risks are risks arising from a bank's operations and are similar to risks faced by companies in other industries. These risks include operational risk, model risk, compliance risk, conduct risk, reputational risk, and ESG risk. Investment risk is describing a specific example of risk found in the investment-management industry, and we'll explain this risk in more depth towards the end of this chapter.

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