What is Risk Management? A business man may find it necessary to search for an answer to such question. Especially if he is managing his own business and have several people under his rooster.
So, what is risk management? Well, risk management involves assessing and calculates any business ricks. Then it is your responsibility to take certain measures to counteract as well as reduce or control such risks. It is also a part of the compliance function. However, can also be part of a particular business unit. Which are securities trading desks as well as loan origination departments.
Now, if you intend to work in risk management. You need to take up a bachelor’s degree as the bare minimum and it likewise requires MBA. You need to have a strong quantitative skill to make it into such management.
In risk management there are also duties and responsibilities that you need to be aware of. It is mostly concerned on identifying as well as calculating the risks faced by your firm.
Risk managers are either known to be generalists or specialists. In which the former is known to cover many different areas, while the latter is known to concentrate on a single area.
In financial services industry however, there are certain major phases of risks involved. However, it is not limited with the following factors: Losses on securities held by the traders, Defaults on loans doled out by the company, Lose of investment securities held by the company’s own account and the counter party risk.
Risk managers as well as its personnel’s are known to build up, apply and implement certain rules and regulations which were designed to lessen such risks. They likewise employ several financial instruments and contracts to prevent as well as control risks. Such as swaps, insurance, Derivatives, Future Contracts as well as option contracts.
Once you become a risk manager, commitment is regarded as a high variable, dependent on the company and your position. Since you’re handling a vital position, you can expect to put in workweeks that would far exceed at 40 hours. On the other hand, when financial or economic crisis arise consider yourself to be always on call.
Since you’ll be handling a crucial position, you’ll be expected to perform a satisfactory job. In addition, you can expect a higher pay and respect from your constituents, thus making your work place fast-paced and stimulating.
Image credited to wallstreetlaw.typepad.com/sherman/worst-case-scenario-risk-management/
