Risk capacity: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Expand.) |
imported>Doug Williamson (Add link.) |
||
| (2 intermediate revisions by the same user not shown) | |||
| Line 3: | Line 3: | ||
The maximum level of risk a financial firm can assume within the constraints of its regulatory capital and liquidity obligations, and its obligations to depositors, other customers, and shareholders. | The maximum level of risk a financial firm can assume within the constraints of its regulatory capital and liquidity obligations, and its obligations to depositors, other customers, and shareholders. | ||
The risk appetite is then set at a level within the maximum risk capacity, | The risk appetite is then set at a level within the maximum risk capacity, normally lower than the maximum capacity. | ||
| Line 13: | Line 13: | ||
== See also == | == See also == | ||
* [[Capacity]] | |||
*[[Risk appetite]] | *[[Risk appetite]] | ||
*[[Risk tolerance]] | *[[Risk tolerance]] | ||
[[Category:Identify_and_assess_risks]] | |||
[[Category:Manage_risks]] | |||
[[Category:Risk_frameworks]] | |||
[[Category:Risk_reporting]] | |||
Latest revision as of 20:43, 4 July 2022
1. Banking.
The maximum level of risk a financial firm can assume within the constraints of its regulatory capital and liquidity obligations, and its obligations to depositors, other customers, and shareholders.
The risk appetite is then set at a level within the maximum risk capacity, normally lower than the maximum capacity.
2.
In the non-financial sector, the term 'risk capacity' is sometimes used to mean very much the same as risk appetite.
