Part Five Summary of Risks
The following appendices bring together all the risks described elsewhere in the book. For convenience they are grouped by general categories. Some risks not previously mentioned are included for completeness.
They consist of:
- Operational Risks
- Human Risks
- Control Risks
- Processing Risks
- Organisational Risks
- Unforeseen Risks
Unforeseen Risk
No stakeholders in a business – investors, managers, employees or customers – want unforeseen risk. Due to its sudden effect, the organisation is ill-equipped to deal with it and its consequences are unknown. One of the major causes of the recent credit crunch was the failure of many organisations to take into account a particular risk: that so many American sub prime mortgage borrowers would be unable to repay their debt. Unforeseen risk points to poor management and supervision and reduces confidence in the financial entity. If risk is present, it should be known about and then sensible decisions can be taken about how to manage it.
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