Financial Risk Management For Dummies

Chapter 3

Taking Charge of Risk

In This Chapter

Differentiating risk from opportunity

Understanding the four requirements of a goal

Setting goals considering all the factors

Risk management isn’t risk measurement, nor risk analysis, nor risk navel gazing. Risk management is active. Risk managers don’t spend time worrying about risk; they make decisions and live with the consequences.

Of course, it’s one thing to say, ‘Be proactive’, it’s another thing to know what to do. Often the problem isn’t choosing the right option, it’s figuring out what the options are.

The average person is no concert pianist, but if you put him in that job he at least understands that the idea is to the press the keys and pedals on the piano in order to make the audience applaud. The amateur would know what to do and what the goal was, but would probably be unable to accomplish it. The same person appointed risk manager of a global bank would likely not even know what kinds of things he was supposed to be doing, and what the goal was … unless he’d read this chapter, of course.

I don’t tell you how to be a risk manager in this chapter, but I do tell you just what it means to be a risk manager.

Distinguishing ...