Risk appetite is both a management and governance tool that allows businesses to make risk-return trade-offs in a controlled and transparent manner. Despite this, in many organisations it is only seen as a risk limitation or risk reduction measure. However, a well-crafted risk appetite framework should also encourage risk taking if the risk appetite is underutilised or opportunities with the right risk-return balance are presented.
Key learning objectives:
What is risk appetite?
How do we arrive at an agreed risk appetite statement?
How can risk appetite add value to the organisation?
The Basel Committee Perspective on Operational Risk
Peter Eisenhardt • 18:32