ERM Portfolio View of Different Risks

This major financial institution used to estimate capital at risk and loss provisioning on a product-by-product basis, using experience-based percentages. Using Enterprise Risk Management (ERM) principles and after a review of available models across industries, it built a comprehensive framework and model allowing it to include all its products on a comparable basis and to simulate potential future scenarios. This approach allowed it to take into account concentration and diversification portfolio effects, thereby providing a more realistic view of the overall risks it was taking. The impact of adding new product lines or major transactions to the business could be simulated, providing an enlightening comparison of potential returns versus increased or decreased relative levels of risk on a portfolio basis.

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Toronto Office
Toronto Star Building
1 Yonge Street, Suite 1801
Toronto, Ontario, M5E 1W7
+1 416 214 7596

Montreal Office
1000 de la Gauchetière West,
Suite 2400
Montreal (Quebec) H3B 4W5
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United Kingdom
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