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Risk Management at Hsbc

Satisfactory Essays
Strategic Risk Management

HSBC
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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In accordance with FSA (Financial regulator in UK), the group is publishing each year the Pillar 3 Disclosures; banks are required to disclose all their material risk in order to encourage market discipline by developing a set of disclosures which allow market participants to asses certain specified information on the scope of application of Basel II (capital risk exposures, and risk assessment processes).

SWOT Analysis
Strengths
• The global presence (Europe, Asia and South America) helps the bank to spread risk. • Good capitalization which enabled the bank to perform relatively well during the crisis. • The good capitalization allows more autonomy, which means that the bank will not need to borrow money in the near future. • Strong presence in emerging markets, which favors the bank to take advantage of future growth in those economies. • Sustainability (reducing operating costs with the launch of a series of projects to reduce energy, carbon emissions, water and waste between 2008 and 2011).

Weaknesses • Strong branding of global presence might be seen negative by some of the customers. • Weaknesses through the framework of internal control.[2] • By introducing founds for small and medium sized enterprises (SME), the bank is exposed to the risk due to the current economic situation.
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