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risk measurement and management

risk measurement and management JVDJe
The 2008 financial crisis caused seriously negative influences on all aspects of the economy in general and the capital market in particular, leading to the systematic collapse of series powerful corporates. As a response to the global financial crisis, urgent missions are to enhance ability of market participants to handle shocks from financial stress by improving risk measures as well as the estimation of risks and promote standard principles to help bank and financial institutions to keep the financial stability. The role of risk management is becoming more and more important in business goals, and risk measurement models are quickly becoming one of the hot topics of the financial world as an inevitable consequence. In the context that the global economy is facing many difficulties nowadays, especially the significant impact of the coronavirus pandemic, the financial market of each country is confronting with many uncertainties and potential risks. Hence, the question that arises is how to measure and manage risks in the financial industry? In order to control risk effectively, an essential requirement is to develop measures of financial loss. Up to now, there have been many indicators and methods of measuring financial risk are being applied. The Value at Risk (VaR) is one of the most popular methods to measure financial risk in the market risk management and the credit risk of the portfolio. The VaR was developed by JPMorgan (1994) and was popularized as market risk measure for banking regulators. The Basel Committee on Banking Supervision (BCBS) then required financial institutions to meet capital requirements on the basic of VaR estimate, that demonstrated for the attractiveness of VaR. However, VaR still has limitations both on theoretical and practical aspects. A recently new approach to measure the market risk portfolio in financial field is Expected Shortfall (ES), which is considered as remedy for the deficiencies of VaR.
The 2008
financial
crisis caused
seriously
negative
influences on all aspects of the economy
in general
and the capital
market
in particular
, leading to the systematic collapse of series powerful
corporates
. As a response to the global
financial
crisis, urgent missions are to enhance ability of
market
participants to handle shocks from
financial
stress
by improving
risk
measures
as well
as the estimation of
risks
and promote standard principles to
help
bank and
financial
institutions to
keep
the
financial
stability. The role of
risk
management is becoming more and more
important
in business goals, and
risk
measurement models are
quickly
becoming one of the hot topics of the
financial
world as an inevitable consequence.

In the context that the global economy is facing
many
difficulties nowadays,
especially
the significant impact of the coronavirus pandemic, the
financial
market
of each country is confronting with
many
uncertainties and potential
risks
.
Hence
, the question that arises is how to
measure
and manage
risks
in the
financial
industry? In order to control
risk
effectively
, an essential requirement is to develop
measures
of
financial
loss. Up to
now
, there have been
many
indicators and methods of measuring
financial
risk
are
being applied
. The Value at
Risk
(
VaR
) is one of the most popular methods to
measure
financial
risk
in the
market
risk
management and the credit
risk
of the portfolio. The
VaR
was developed
by JPMorgan (1994) and
was popularized
as
market
risk
measure
for banking regulators.
The
Basel Committee on Banking Supervision (
BCBS
) then required
financial
institutions to
meet
capital requirements on the basic of
VaR
estimate, that demonstrated for the attractiveness of
VaR
.
However
,
VaR
still
has limitations both on theoretical and practical aspects. A recently new approach to
measure
the
market
risk
portfolio in
financial
field is
Expected
Shortfall (ES), which
is considered
as remedy for the deficiencies of
VaR
.
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IELTS essay risk measurement and management

Essay
  American English
2 paragraphs
308 words
5.5
Overall Band Score
Coherence and Cohesion: 5.5
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    One main idea per paragraph
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Lexical Resource: 5.0
  • Try to vary your vocabulary using accurate synonyms
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  • Check your work for spelling and word formation mistakes
Grammatical Range: 6.5
  • Use a variety of complex and simple sentences
  • Check your writing for errors
Task Achievement: 5.0
  • Answer all parts of the question
  • ?
    Present relevant ideas
  • Fully explain these ideas
  • Support ideas with relevant, specific examples
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