As part of a series of (Dutch) Webinars on Financial Services hosted by NIBE-SVV one of our senior managers, Erik Vijlbrief, was asked to share his view on the fundamentals of financial risk management. The origin of financial risks is explained in the Webinar based on a simplified bank balance sheet. Furthermore, an overview is given in the development of regulation of financial risk management in the past 40 years and a typical risk management process is discussed that features a continuous cycle of risk identification and management.
Recent trends in financial risk management are discussed at the end of the Webinar. The trend to introduce an increasing number of complex models, in the years before the crisis, is now in the process of being reversed as the difference between risk and complexity is being more and more acknowledged. This has an impact on the way risk is being managed, as simpler challenger models are introduced that can be used to compare the outcome of the more complex models based on a small number of simple variables.
Furthermore, scenario analysis and stress testing is used to compliment these models. Together, this combination of risk metrics will result in a more complete insight in the risks and therefore to a more stable financial industry.
For more information, please contact Erik Vijlbrief on +31 35 692 89 89 or via email.