Risk: The New Management Imperative in Finance

The Full Spectrum of Risks 2

Being prudent and risk-aware professionals, we will plan the path of our investigation. The lay of the land, the contours of risk and risk management, will guide our planning process. Exhibit 2.1 represents the spectrum of risks that business organizations face. This particular spectrum covers the risks that a commercial bank has, but is largely applicable to securities firms as well. The distinctions between banks and securities firms, while still significant, are shrinking.

Exhibit 2.1 The Spectrum of Risks. Appendix I contains a definition for every financial risk noted in this spectrum, along with examples of how the risk can hurt or even mortally wound an organization.

This spectrum can easily be adapted and ...