A decade ago, the concept of Financial Risk Management was confined to Western countries or developed countries. Financial Risk Management was having very little presence in Indian Financial Industry. Basel I forced some big international banks to follow risk management practices. Thanks goes to BIS and BASEL II document for wide acceptance of Financial Risk Management concept by banks and financial institutions worldwide. In India also, implementation of Basel II norms has been satisfactory. However, many financial institutions in India are missing risk culture and risk awareness among their finance managers. Till the time in 2007, RBI forcefully imposed implementation of Basel II norms on Indian banks, it was kept in back burner. RBI had issued a deadline to implement Basel II norms to the Indian banks with the international presence by 31st March`2008 and for the others by 31st March`2009. The challenge of RBI has now increased many fold by introduction of Basel III. The implementation of Basel III will start from 1st January `2013 and needs to be completed by 1st January` 2019.
Focus of the Book
We have written this second edition of Financial Risk management with the following objectives:
1. To create financial risk awareness among young finance managers and students of various professional courses in finance discipline.
2. To demonstrate the readers that the subject of Financial Risk Management is interesting, challenging, simple to understand and very much relevant in practice.
3. To explain the concepts and theories of Financial Risk Management in the simple manner so that the interest of readers is developed in the subject.
4. To provide a comprehensive knowledge about the Financial Risk management at one place to the readers.
5. To attract more students and professional to choose Financial Risk Management as career.
6. To help the risk managers understand the logics of risk management in a better way.
The Financial Risk Management combines theory and practical applications.
PART A : Introduction of Risk Management
1. The Role of Financial Institutions
2. Need of Risk Management
3. Identification of Risks
PART B : Measurement of Various Risks
4. Measurement of Interest Rate Risk
5. Measurement of Market Risk
6. Measurement of Credit Risk
7. Measurement of Operational & Technology Risk
8. Measruement of Foreign Exchange & Sovereign Risk
9. Measruement of Liquidity Risk
10. Measruement of Off Balance Sheet Risks
PART C: Management of Risks
11. Risk Management Tools
12. Interest Rate Risk Management
13. Market Risk Management
14. Credit Risk Management
15. Operational Risk Management
16. Foreign Exchange & Sovereign Risk Management
17. Liquidity Risk Management
18. Management of Capital Adequacy
19. Enterprise Wide Risk Management
20. Risk Reporting
PART D : Regulatory and Other Issues in Risk Management
21. Regulatory Issues in Risk Management
22. Bank for International Settlement (BIS), Basel I, II & III
PART E : Case Studies
23. Cases on Failure of Risk Management
PART F : Other Important Concepts of Risk Management
24. Concepts Related to the Risk Management