ABSTRACT
Making decisions in the face of risk, however signicant its impact, can be quite challenging. The greater the impact of a risk on a person, property or wealth, the higher the level of care necessary to make choices in order to ensure the outcomes are as desirable as possible. The risk management framework of Chapter 2 formulated a guideline to develop a strategy for handling risk; however, the actual implementation of the framework requires quantifying the relevant risks and their impacts. We developed models for the quantication of risk in Chapter 1. To assess the impact of risk, as is fundamentally needed for the implementation of a risk management framework, in today's complex nancial markets and institutions requires a well-developed and versatile toolset. The regulatory environment in place for various segments of the nancial sector described in Chapter 3 makes assessment and management of risk under stipulated constraints not only a desired goal, but a mandatory activity of the institutions.
