Riesgos

Risk Management in Financial Institutions
Formulating Value Propositions

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Risk Management in Financial Institutions
Formulating Value Propositions
Editor in Chief Dr. ing. Jürgen H.M. VAN GRINSVEN Jürgen van Grinsven helps financial institutions to solve their complex risk management problems. In his opinion, solutions for risk management needto be effective, efficient and lead to satisfaction when implemented in the business. This book helps (senior) risk managers to formulate value propositions. Why? Paramount to their success is the ability to identify, assess, formulate and communicate value propositions to their stakeholders.

Editor in Chief x Dr. ing. Jürgen H.M. van Grinsven

Editorial board x x x x Michael BozanicMBA Drs. Philip Gardiner Joop Rabou RA RE Drs. Gert Jan Sikking

Advisors x x Prof. dr. Fred de Koning RA RE Drs. Patrick Oliemeulen CAIA FRM RV

Cover design and Photo x Drs. Wilfred Geerlings (wilfredgeerlings.com)

Assistant x Ir. Henk de Vries

Guidance and questions before you read this book.

Are you able to formulate and communicate value propositions to your 1. Introductionto risk management stakeholders?

2. Risks in client relationships

Life-cycle needs are continuously evolving, is your organization ready for tailored client needs?

3. Risks in the building blocks

The foundations of risk management in financial services have been in place for years. However, as concepts, tools, and approaches are changing is your organization benefitting fromthese developments?

Risk managers are scrambling to understand the intricacies of Basel II and 4. Risks in running the business Solvency II. In their desire to understand market, credit, and insurance risks have your risk managers relegated Operational Risk to an afterthought? The most important job of senior risk managers today is to: identify, formulate, assess, deliver and communicatevalue propositions to their stakeholders. How do you formulate yours?

5. Formulating value propositions

© Copyright 2010 by Dr. Jürgen H.M. van Grinsven and IOS Press. All rights reserved. ISBN 978-1-60750-087-2 (print). ISBN 978-1-60750-475-7 (online). First edition. Editor in Chief: Dr. ing. Jürgen H.M. van Grinsven Cover design and photo: Drs. Wilfred Geerlings Assistant: Ir. Henk deVries Dr. ing. Jürgen H.M. van Grinsven www.jurgenvangrinsven.com Tel: +31.6.15.586.586

Published by IOS Press under the imprint Delft University Press Publisher IOS Press BV Nieuwe Hemweg 6b 1013 BG Amsterdam, The Netherlands Tel: +31-20-688 33 55. Fax: +31-20-687 00 19 Email: info@iospress.nl www.iospress.nl www.dupress.nl Legal notice The publisher is not responsible for the use whichmight be made of the following information. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written permission of the author. Printed in The Netherlands

Key words: Risk management, financial institutions, value propositions, financial riskmanagement, nonfinancial risk management, operational risk, integrity, compliance, credit risk, key risk indicators, data scaling, modeling operational risk, losses, hedge funds, Basel II, Solvency II.

Table of contents
1. INTRODUCTION TO RISK MANAGEMENT .....................................................1

1.1. Risk management in financialinstitutions............................................................. 2 1.1.1. Importance of risk management ........................................................................ 2 1.1.2. Implementation of risk management ................................................................. 3 1.1.3. Summary .......................................................................................................... 5 1.1.4. References...