Towards better financial risk learning

Anna Waldvogel and Niall Whelan

Journal of Risk Management in Financial Institutions, 2008, vol. 1, issue 4, 382-393

Abstract: As recent events have shown, finance professionals need to be as comfortable with risk concepts like liquidity and capital as they currently are with business concepts like compound interest and variable annuities. The firm that succeeds in integrating risk awareness into its business activities has a decided advantage over its competition. Attaining this degree of risk knowledge requires innovative learning approaches drawn from technical communication, presentation, knowledge management and training, as this paper explores. Although external risk training is available within the finance industry, this paper proposes that the interpretation and application of risk concepts are unique to the organisation and will necessarily require customised in-house training. Such a complex effort demands executive sponsorship, and partners within risk management and multiple business units. This paper highlights two financial risk concepts — economic capital and potential future exposure — and proposes practical learning recommendations for each.

Keywords: financial risk management; financial institutions; credit risk; learning strategy; training; economic capital; potential future exposure; technical communication (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2008:v:1:i:4:p:382-393

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