Aligning risk management framework with risk appetite

Ariane Chapelle sets out metrics and tools to keep firms within their risk appetite

After dedicating their attention successively to incident data collection, governance, scenarios and risk assessments in relatively independent ways, regulators are now focusing on the overall consistency of risk management frameworks, which comprise the methods and tools a firm uses to manage its risks. This article elaborates on a 2007 publication by the erstwhile Financial Services Authority (FSA), which looked at ways to establish an aligned risk management framework.

The FSA's brief report