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By Jean Pascal KRETZ, Managing Consultant Finalyse Luxembourg
In our previous article, we examined the risk components constituting the backbone of the risk appetite definition – Risk Profile, Risk Capacity, Risk Tolerance, and Risk Limits. With these in place, it is possible to establish a strong risk appetite framework that we will now endeavour to express in the risk appetite statement.
The Statement issues the high-level strategy applicable throughout the institution and simultaneously acts as an internal and external communication tool. The company’s approach to risk as seen from the Board of Directors and actual operational reality could differ significantly without a company-wide communication on corporate strategy, risk typology and...
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