What exactly is risk management and why should it be done

I can introduce to you the logic of the construction of the general comprehensive risk management system and the Huacai risk management system. It is an excerpt from the Huacai Consulting Group website, they are an authority in this area, and it should be helpful to you:

A general comprehensive risk management system.

Risk strategy refers to the overall strategy of determining risk appetite, risk tolerance, and risk management effectiveness standards around the development strategy of an enterprise according to its own conditions and external environment, selecting appropriate risk management tools such as risk taking, risk avoidance, risk transfer, risk conversion, risk hedging, risk compensation, and risk control, and determining the allocation principles of human and financial resources required for risk management.

Organizational function is the specific implementer of risk management, through a reasonable organizational structure design and functional arrangement, can effectively manage and control enterprise risks.

Internal control As part of a comprehensive management system, internal control is the management and control of various risks that affect the achievement of business process objectives through the design and implementation of a series of policies, systems, regulations and measures for each major business process of the enterprise.

Risk management refers to a set of measures, policies and methods for enterprises to use financial means to manage and transfer risks.

Risk Management Information System Risk management information system is an information system that transmits enterprise risk and risk management status, including the storage, analysis, model, transmission, internal reporting and external disclosure system of enterprise information and operational data.

The logic of the construction of Huacai's risk management system is:

The first level: based on the management and control system, build a risk system at the parent company level (mainly the strategic positioning of the parent company, the operation of the parent company itself, and the performance of the functions of the parent company's investors).

The second level: the subsidiary risk system (the parent company's governance of the subsidiary, as well as the subsidiary's strategy and operation, and the subsidiary's 14 management and control subsystems).

The third level is the management, supervision and optimization system of the parent company's risk management system of the subsidiary.

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You can take a look at it on that authoritative website.

The significance of risk management is that risk management can be used to measure, evaluate and develop strategies to deal with risks. In this way, risks are avoided or the costs and losses incurred by risks are minimized. Because risks are often inconsistent with the probability of occurrence, it is often difficult to determine the order in which they are addressed, and it must be managed systematically.

History of risk management

1. Origin. Risk management began to take root in the 1930s. Risk management first originated in the United States, in the 1930s, due to the impact of the world economic crisis of 1929 and 1933, about 40 banks and enterprises in the United States went bankrupt, and the economy went back about 20 years. In order to cope with the business crisis, many large and medium-sized enterprises in the United States have set up internal insurance management departments, which are responsible for arranging various insurance programs for the enterprises.

It can be seen that risk management at that time mainly relied on insurance means.

2. Development. After 1938, American companies began to adopt scientific methods for risk management, and gradually accumulated rich experience. The term risk management was formed in the 1950s when risk management developed into a discipline.

Since the 1970s, there has been a global risk management movement. After the 1970s, as the risks faced by companies became more complex and diverse, and the cost of risk increased, France introduced risk management from the United States and spread it within France. At the same time as France, Japan also began research on risk management.

3. Maturity. In the past 20 years, the United States, the United Kingdom, France, Germany, Japan and other countries have established national and regional risk management associations. In 1983, at the annual meeting of the Risk and Insurance Management Association held in the United States, experts and scholars from all over the world gathered in New York to discuss and adopt the "101 Risk Management Guidelines", which marked that the development of risk management has entered a new stage of development.

4. The development of risk management in China.

In 1986, the European Risk Research Society, founded by 11 European countries, expanded risk research to international exchanges. In October 1986, the International Symposium on Risk Management was held in Singapore, and risk management has developed from the Atlantic Rim region to the Asia-Pacific region.

The study of risk management in China began in the 1980s. Some scholars have introduced risk management and safety system engineering theories to China, and they have been satisfied with the trial in a small number of enterprises. For a long time, most enterprises in China lacked awareness of risk management and did not establish a dedicated risk management organization.

As a discipline, risk management is still in the development stage in China. However, with the rapid development of China's economy, risk management has also gained sufficient attention and rapid development in China.

First of all, security is the first principle of the three major operating principles of the bank, only the safety of funds, in order to make the flow of funds, in order to achieve profits;

Secondly, risk management can minimize the risk losses of banks and enterprises;

In addition, risk management can be carried out on the premise of ensuring that the asset quality is reasonable.

Management risk refers to the level of management that is affected by information asymmetry, poor management, and judgment errors in the process of management operation. This risk is embodied in every detail that makes up the management system.

It can be divided into four parts: the quality of managers, organizational structure, corporate culture, and management process. If there is a problem in management, it will cause irreparable losses to the enterprise and managers.

In terms of managers: first of all, it is necessary to strengthen the leader's own moral cultivation, so as to enhance the cohesion and motivation of the enterprise, and at the same time strive to make up for the shortcomings in other aspects such as resource disadvantages, and improve the efficiency and effectiveness of management.

At the same time, it is necessary to expand knowledge, have a certain degree of understanding of the knowledge and methods involved in technological innovation, and enhance communication with technological innovation personnel, so as to organize innovation activities more scientifically.

It is also necessary to comprehensively improve the quality and ability of management personnel, pay special attention to the improvement of cooperation and communication ability among management personnel, and deliberately cultivate the awareness and innovation ability of management innovation.

Management risks include scope risk, time risk, cost risk, quality risk, communication risk, human resources risk, etc.

1. Fan is at risk of this potato circumference

Scope risk refers to the uncertainty of project goals and requirements, including factors such as changes in requirements, defects in requirements, and unclear requirements.

2. Time risk

Time risk refers to the uncertainty of the project's schedule and time, including factors such as insufficient resources, schedule lags, schedule conflicts, schedule delays, etc.

3. Cost risk

Cost risk refers to the uncertainty of project budgets and costs, including factors such as insufficient budgets, cost overruns, rising resource costs, and inaccurate cost estimates.

4. Quality risk

Quality risk refers to the uncertainty of the quality of the products or services delivered by the project, including factors such as quality defects, quality control issues, and non-compliance with quality standards.

5. Communication risk

Communication risk refers to the uncertainty of project communication and information sharing, including factors such as missing information, information delays, and misinformation miscommunication.

6. Human resource risk

HR risk refers to the uncertainty of the project team, including factors such as staff turnover, insufficient staffing, insufficient personnel skills, and personnel management issues.

The risk management of banks is mainly to evaluate, manage and solve business risks of banks. The main content is risk identification, internal risk analysis and evaluation, risk control and risk decision-making.

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There are a lot of books that you can read, and you're too big.

What is risk management in banks.

Risk management refers to the management process of minimizing the possible adverse effects of risks in a risky environment of a project or enterprise. Risk management is important for modern businesses.

When enterprises are faced with the opening of the market, the lifting of laws and regulations, and the innovation of Zheng Xiao's products, the degree of change and volatility increases, and the risk of operation increases. Good risk management can help reduce the probability of decision-making errors, avoid the possibility of losses, and relatively increase the added value of the enterprise itself.

Risk management is divided into two main categories:

Management risk management focuses on the management of risks faced by all enterprises, such as politics, economic knowledge, and social change.

Insurance-based risk management mainly takes insurable risks as the object of risk management, puts insurance management at the core, and takes safety management as a supplementary means.