| CODE | INS1003 | ||||||||||||
| TITLE | Principles of Financial Risk Management | ||||||||||||
| UM LEVEL | 01 - Year 1 in Modular Undergraduate Course | ||||||||||||
| MQF LEVEL | 5 | ||||||||||||
| ECTS CREDITS | 4 | ||||||||||||
| DEPARTMENT | Insurance and Risk Management | ||||||||||||
| DESCRIPTION | This study-unit offers a thorough examination of financial risk management concepts, including different types of financial hazards, risk management frameworks, methods, regulatory factors, practical uses, upcoming trends, and ethical aspects. Students will acquire the information, skills, and ethical mentality needed to identify, analyse, and manage financial risks in a dynamic and complex financial setting via theoretical study, practical activities, and case studies. Study-unit Aims: - To define Financial Risk Management and show it's importance; - To explain the Historical Context and Evolution of Financial Risk Management; - To Define and explain the types of financial risks such as: a) Market Risk, b) Credit Risk, c) Liquidity Risk, d) Operational Risk, e) Systematic Risk; - To define and explain the Risk Management Frameworks and Methodologies; - To define and explain the Financial Risk Management Strategies; - To define and explain the Regulatory and Compliance Considerations; - To discuss the Emerging Trends in Financial Risk Management. Learning Outcomes: 1. Knowledge & Understanding By the end of the study-unit the student will be able to: - Define and classify different types of financial risks, including market risk, credit risk, liquidity risk, operational risk, and systemic risk; - Explain the sources, characteristics, and interrelationships among various types of financial risks; - Apply quantitative and qualitative methods to measure and assess financial risks; - Calculate and interpret risk metrics such as Value at Risk (VaR), Expected Loss (EL), and Stress Testing results; - Analyze the impact of risk factors and scenarios on financial portfolios and organizations; - Describe common risk management frameworks and methodologies used in financial institutions and corporations; - Evaluate risk management strategies such as risk transfer, risk mitigation, risk avoidance, and risk acceptance; - Develop risk management plans tailored to specific risk exposures and organizational objectives; - Define the regulatory landscape governing financial risk management, including Basel Accords, Dodd-Frank Act, and Solvency II; - Explain the role of regulatory bodies and standards-setting organizations in promoting sound risk management practices; - Identify compliance requirements and best practices for risk governance within financial institutions and corporations. 2. Skills By the end of the study-unit the student will be able to: - Apply financial modeling techniques to analyze and quantify risk exposures; - Construct risk models for measuring market risk, credit risk, and other types of financial risks; - Interpret model outputs and make informed decisions based on risk analysis results; - Evaluate risk-return trade-offs and make decisions under conditions of uncertainty; - Assess the impact of risk management decisions on financial performance, capital allocation, and strategic objectives; - Incorporate risk considerations into investment, financing, and hedging decisions; - Communicate effectively with stakeholders about financial risks, risk management strategies, and mitigation efforts; - Prepare clear and concise risk reports and presentations for management, board members, regulators, and other relevant parties; - Foster transparency, accountability, and trust through transparent risk communication practices; - Analyze complex risk scenarios and identify potential vulnerabilities and opportunities; - Develop creative and practical solutions to mitigate financial risks and enhance organizational resilience; - Synthesize information from diverse sources to make informed risk management decisions in dynamic and uncertain environments. Main Text/s and any supplementary readings: - Horcher, K.A. (2005). Essentials of Financial Risk Management. John Wiley and Sons.ISBN-13 978-0-471-70616-8 (pbk.) ISBN-10 0-471-70616-7 (pbk.) |
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| STUDY-UNIT TYPE | Lecture | ||||||||||||
| METHOD OF ASSESSMENT |
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| LECTURER/S | Andrew Neal Farrugia |
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The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints. Units not attracting a sufficient number of registrations may be withdrawn without notice. It should be noted that all the information in the description above applies to study-units available during the academic year 2024/5. It may be subject to change in subsequent years. |
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