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
18 King Street East
Suite 1400
Toronto, Ontario, M5C 1C4
+1 416 214 7596

Montreal Office
1250 René Lévesque Boulevard West
Suite 2200
Montreal (Quebec) H3B 4W8
+1 514 889 5003

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21 Young Street
United Kingdom
+44 (0) 131 344 4626

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