ABSTRACT
This chapter concerns risks that arise within banks and within the financial operations of other organizations. The most significant risks involve credit and Treasury, but there are financial risks in audit and business systems, and they can loom large during due diligence and in project management. The finance function also incorporates many embedded risks and although these are usually routine and thus amenable to management by processes and systems some are lumpy and involve one-off transactions. As this last group of one-off transactions can be technically complex, they have been the source of major corporate disasters. Banks occupy a unique space in consumer perceptions, and unlike most important companies are black boxes to the average customer. Bank services are essential to the daily life of individuals and companies, and to their longer-term goals such as home ownership and business expansion. Treasury operations involve the initiation and execution of transactions that support a firm's funding activities.
