Risk Management at Hsbc Essay

2586 Words Nov 26th, 2011 11 Pages
Strategic Risk Management

Market Risk Evaluation

Table of contents

1. Introduction …………3
HSBC and Research Qestion……………………………………………………………3

2. Methodology. 3

3. Analysis 4 3.1Managing Risk at HSBC and SWOT Analysis 4 3.2Credit Risk 6 3.3 Market Risk 7 3.3 Operational risk 9

4. Discussion 11 Scenarios 11

5. Conclusions 12

5. Perspectives 12

6. References 13

7. Annex index 24

1. Introduction

Starting with the early 90’s the focus on risk management has been increasing leading to a change in the business models adopted by different companies. The recent crisis has revealed that managing risk is not an option but a necessity, and it can be stated that lately the banking
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gave a practical aspect to the theory read. Furthermore the articles read and the definitions found in the analyzed company’s materials extended the knowledge about credit analysis and credit analysis gasped during the course.

3. Analysis

1. Risk Management at HSBC & SWOT Analysis

At HSBC, the approach to risk is conservative, aligned at the same time with the bank’s strategy. The risk within HSBC Group is measured and managed by functional risk teams at group, regional and country levels. The organization risk is the following:

[pic] Figure 1: Risk Measurement and Management in HSBC[1] As it can be noticed in the figure above, HSBC adopted Enterprise Risk Management strategy. The group has a Chief Risk Officer which compares and evaluates all risks that the bank might face in a holistic way. Some of the advantages of adopting ERM which we discussed during our course are: • The integrated approach into business’s decisions; • ERM involves managing all of the risks affecting an organization’s ability to meet its goals, regardless of the types of risks being considered; • ERM emphasizes results based performance measurement throughout the organization. Risk Appetite – framework for managing risk at HBC Risk appetite expresses the types and quantum of risk that HSBC whishes to be exposed to base on: group’s core values, strategy, and risk management competencies.

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