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Financial Risk Management: An Introduction

Financial Risk Management: An Introduction

Mirela-Madalina Stoian, Rares-Gabriel Stoian
Copyright: © 2018 |Pages: 12
ISBN13: 9781522554813|ISBN10: 1522554815|EISBN13: 9781522554820
DOI: 10.4018/978-1-5225-5481-3.ch007
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MLA

Stoian, Mirela-Madalina, and Rares-Gabriel Stoian. "Financial Risk Management: An Introduction." Global Business Expansion: Concepts, Methodologies, Tools, and Applications, edited by Information Resources Management Association, IGI Global, 2018, pp. 97-108. https://doi.org/10.4018/978-1-5225-5481-3.ch007

APA

Stoian, M. & Stoian, R. (2018). Financial Risk Management: An Introduction. In I. Management Association (Ed.), Global Business Expansion: Concepts, Methodologies, Tools, and Applications (pp. 97-108). IGI Global. https://doi.org/10.4018/978-1-5225-5481-3.ch007

Chicago

Stoian, Mirela-Madalina, and Rares-Gabriel Stoian. "Financial Risk Management: An Introduction." In Global Business Expansion: Concepts, Methodologies, Tools, and Applications, edited by Information Resources Management Association, 97-108. Hershey, PA: IGI Global, 2018. https://doi.org/10.4018/978-1-5225-5481-3.ch007

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Abstract

The present paper intends to serve as an introduction into the financial risk management universe. It starts with the basic assumption that performance of an organization is inseparable from the risks it is facing. Any organization should have in place the necessary tools to identify, assess and constantly measure the risks it is exposed to. The paper focuses in defining the basic principles in creating a viable risk management framework that keeps track of three major categories of identified financial risks: market risk, credit risk and liquidity risk. Emphasis is put on the models to measure these types of risks but also on the tools an organization can use in order to reduce them. The second part of the paper is dedicated to recent events that shaped and shocked financial markets and illustrate the consequences faced by organizations when risks are not properly assessed and the risk management models in place are based on dangerously unrealistic notions.

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