Paper on Risk Appetite
The attached paper on "Constructing a Risk Appetite Framework: An Introduction" was written by a Working Party of the Enterprise Risk Management Committee of the Society of Actuaries in Ireland. This paper is intended to act as an aid to undertakings working towards compliance with the Central Bank of Ireland "Corporate Governance Code for Credit Institutions and Insurance Undertakings". Under the Code:
“The board is required to understand the risks to which the institution is exposed and shall establish a documented risk appetite for the institution”.
The documented risk appetite must be in place by 30th June 2011, so this paper is timely. Readers who are new to the measurement and determination of risk appetite, as well as those who are familiar with these concepts, should find it to be a useful resource.
The authors of the paper plan to host an interactive discussion evening on risk appetite in the coming months. They are therefore interested in receiving feedback on the types of practical issues that are being encountered in determining risk appetite. This feedback will form the basis for what promises to be a very interesting and informative discussion.
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