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Assessing Risk in a Global Economy

  • Michel Henry Bouchet
  • Charles A. Fishkin
  • Amaury Goguel
Chapter

Abstract

The word “risk” is often used interchangeably with the word “uncertainty.” For our purposes here, “uncertainty” is an overarching term that refers to any condition where the particular outcome is not known. “Risk” is a special case of uncertainty where we know both the set of potential outcomes and the probabilities of such outcomes. “Ambiguity” is another special case of uncertainty where we know the set of potential outcomes but not their probabilities. Uncertainty involves both the possibility of financial gain or loss. Risk management is ultimately the capability to anticipate significant themes and issues that can impact the well-being of an organization. It is an ongoing process that organizations use to identify, measure, monitor, and take actions relating to the wide range issues that they are exposed to in carrying out their mandates and missions.

Keywords

Risk Uncertainty Ambiguity Risk management Credit risk Market risk Operational risk Regulatory risk Strategic risk Business risk Reputational risk Legal risk liquidity risk Country risk Inherent risk Residual risk Risk appetite Model risk 

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Michel Henry Bouchet
    • 1
  • Charles A. Fishkin
    • 2
  • Amaury Goguel
    • 3
  1. 1.Skema Business SchoolParis-Sophia Antipolis-Suzhou-RaleighFrance
  2. 2.ChappaquaUSA
  3. 3.Skema Business SchoolParis-Sophia Antipolis-Suzhou-RaleighFrance

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