the risk that interest rates will raise and that customers on variable rate loans may not be able to afford the increase in interest.
1 of 25
market risk
the risk that the value of shares or share price may decrease, possibly due to an economic downturn, resulting in shareholders having reduced market portfolios.
2 of 25
credit risk
the risk a bank takes when the give out a loan as the customer may not repay the loan
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macro-prudential risk
the risk that the unsoundness of a bank could affect the market and the economy as a whole.
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risk management
the sum of all the actions taken by an individual or organisation to manage risks that could occur.
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regulatory risk
risk of material loss, reputational damage or liability arising from the failure to comply properly with the requirements of regulators or with codes of practice.
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operational risk
the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events. (Process risk, people risk, systems risk, external risk)
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reputational risk
risk of the bank suffering damage to its standing in the market, in the media, or with clients due to some action on its own part that the bank receives adverse publicity.
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risk identification
workshops, questionnaires, and loss data capture analysis, near miss analysis and experience, PESTL analysis.
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risk assessment
identify risks, categorise /group risks, carry out an initial assessment, plot risks on a impact and probability grid, prioritise risks, further assess the risks, develop mitigation actions, review regularly.
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risk avoidance
where the risk is such a threat that the plan is avoided all together.
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risk sharing
- overall risk is reduced by sharing the risk with another party such as a joint venture or outsourcing.
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risk transfer
risks are transferred to another party who accepts the risk. E.g. insurance policy.
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risk acceptance
banks acknowledge the risks are there but accept them.
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risk reduction
measures used to reduce the risk incurred.
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risk retention
‘buying the risk’ the bank decides to accept the risk but has plans in place to mitigate the impact of the risk event if it should occur.
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risk monitoring
- should be and on-going process, on an on-going basis. Risk register.
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key risk indicators
performance indicators- essential management information to tell them how well the business is doing. It does not indicate how much risk is being run to achieve the performance.
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risk indicators
a health check on the performance of the business used by all functions to ensure risk is satisfactorily controlled.
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prudential risk
risk that a company could collapse due to poor or inefficient management.
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bad faith risk
mis-selling, fraud, misrepresentation or failure to disclose information
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complexity/unsuitability risk
ack of understanding from the consumer, leading to the wrong choice of product.
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firm systematic framework
preventive work trough structured assessment of the conduct of firms.
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event driven work
dealing faster and more decisively with problems that are emerging or have happened and securing customer redress or other remedial work where necessary. This will cover issues that occur outside the assessment cycle and will use data monitoring
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issues and products
campaigns on sectors of the market or products within a sector that are putting or may put consumers at risk. Sector risk assessment, looking at what is causing poor outcomes for customers. Uses data analysis, market intelligence
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Other cards in this set
Card 2
Front
the risk that the value of shares or share price may decrease, possibly due to an economic downturn, resulting in shareholders having reduced market portfolios.
Back
market risk
Card 3
Front
the risk a bank takes when the give out a loan as the customer may not repay the loan
Back
Card 4
Front
the risk that the unsoundness of a bank could affect the market and the economy as a whole.
Back
Card 5
Front
the sum of all the actions taken by an individual or organisation to manage risks that could occur.
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