Risk management is the analysis of risk coupled with the implementation of quality risk controls. Risk management is needed for banks and financial institutions, mainly because it insures a margin of safety that guarantees a levered financial firm’s solvency.

The unpredictability and inherent risks associated with the financial markets makes it vital for financial institutions and banks to implement risk management controls. The level of quality risk management policy and controls can make or break (literally) banks or financial institutions. Read the rest of this entry »