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Risk appetite in the financial services industry

A requisite for risk management today

While the concept of risk appetite existed before the global financial downturn, the benign economic conditions that existed at the time gave firms little reason to focus on it.

Certainly, it was not as widely used in the industry as it is today and the related terminology was not as common. 

Prior to the downturn, there was a general sense of comfort among the financial services industry firms around levels of risks assumed and how the desired levels of risk were articulated.Prior to the downturn, there was a general sense of comfort among the financial services industry firms around levels of risks assumed and how the desired levels of risk were articulated.

For the purpose of context setting, this paper provides a brief recap of the evolution of the risk appetite concept in the banking industry. Our main focus, however, is the practical application of the risk appetite framework to help board members and senior business and risk executives drive the implementation of such a framework at their institutions. 

Risk appetite in the financial services industry
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