What is Risk Management?

Risk Management has moved beyond telling investors not to put their eggs in one basket (portfolio diversification).

At UConn's MS in Financial Risk Management Program, we delve deeper into risk components, assess marginal effects of new investment choices to portfolio risk, evaluate alternate risk management solutions to capital structure induced risk exposures while keeping tabs on the overall enterprise framework.

After all, the greatest losses to investors and organizations alike have resulted not from faulty computations, but decision making failures.

To me, Financial Risk Management means looking at a Financial institution's overall business (Operational Risk) in order for it to holistically protect itself from all sorts of exposure - from losses resulting from defaults by lending (Credit Risk) to trading counterparties (Market Risk).

Financial Risk Management is a specialization within the field of Finance which deals with identifying, mitigating and thereby managing financial risks on a day to day basis.