Risk Management Portfolio Project. The Chief Risk Officer

1356 WordsFeb 6, 20176 Pages
Risk Management Portfolio Project The chief risk officer for a small community bank must look at operational, financial and strategic risk. They must also be aware of both traditional risk management, as well as financial enterprise risk management. Operational risk is a type of risk that would involve the people, the processes the systems and external events that could take place. Historically operational risks are managed by front end managers were due to larger losses taking place in recent years a different focus to the approach has evolved. Financial risk is one that goes hand-in-hand with the operation of a bank and maybe one that seems the most appropriate or commonplace for financial institution the different types of financial…show more content…
The difference primarily would be for more detail focus as to what the manager of a bank would be concerned. The plan to take these goals into account which consists of tolerable uncertainty, legal and regulatory compliance, survival, business continuity, earning stability, profitability and growth, social responsibility, and economy of risk management operations (Elliott, 2012, p. 1.16). The first would be to look at some risk that would fall into the traditional category for risk management models. The first of which also falls under normal risk management goals and it is that of legal and regulatory compliance. Legal and regulatory compliance is something that is second nature for a bank. There are many well-established federal, state and local regulations that banks must follow. Some areas that a bank would have to answer to would be but not limited to potentially the Office of Thrift Supervision. This would come into play if the institution were considered a savings bank. As a commercial community bank, the Federal Trade Commission along with the Federal Reserve Banks regulations are areas of concern. One risk that stands out he would be the truth in lending act, also known as regulation Z. This is an act that goes back to 1968 that requires a lending institution such as a bank to also adhere to revisions that were made to the act in 1976 under the

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