1. RISK
MANAGEMENT
Tunahan BAYIR

2. In this presentation we will handle...
 Definition Of Risk
 Understanding And Analysing Risk
 Definition Of Risk Management
 Risk Management Planning, Tools And Techniques
 Examples Of Poor Risk Management

3. DEFINITION OF ‘RISK’
 The chance that an investment’s actual return will be different than
expected.

4. DEFINITION OF ‘RISK’

5. DEFINITION OF ‘RISK’
 Cumulative effect of the probability of uncertain occurrences that may
positively or negatively affect project objectives.

6. UNDERSTANDING AND ANALYSING RISK
The nature of any given risk is composed of three fundamental elements:
 The Event
 The Probability
 The Severity (or impact)

7. UNDERSTANDING AND ANALYSING RISK

8. UNDERSTANDING AND ANALYSING RISK
Example
 Building a house?
 Going Alaska?

9. UNDERSTANDING AND ANALYSING RISK
 Risk Attitudes And Appetites
 Classifying Risk
 Risk Breakdown Structure
 Risk Taxonomy
 Risk Facets

10. DEFINITION OF RISK MANAGEMENT
 The process of identification, analysis and either acceptance or mitigation of
uncertainty in investment decision-making.

11. RISK MANAGEMENT PLANNING, TOOLS
AND TECHNIQUES
 Financial Risk Managemenet: Financial risk is the loss of key resources like
funding, etc. In this case the company will not have adequate cash flow to
meet financial obligations. Credit risk, liquidity risk, market risk, operational
risk are different types of financial risks.
 Credit and Investment Risk Management: When the borrower becomes
default and was unable to make payments as promised it is said to be Credit
risk, also called default risk. Investment risk was associated with this where
the investor losses his principal and interest too.

12. RISK MANAGEMENT PLANNING, TOOLS
AND TECHNIQUES
 Liquidity Risk Management: Sometimes due to lack of liquidity in the market
an asset cannot be sold to make the profit or to prevent a loss this is what
called as Liquidity risk.
 Market Risk Management: Due to the change in value of the market risk
factors value of investment portfolio or the value of a trading portfolio will
decrease. Foreign exchange rates, stock prices, interest rates, and
commodity prices are the standard Market risk factors.

13. RISK MANAGEMENT PLANNING, TOOLS
AND TECHNIQUES
 Operational Risk Management: A risk arising from execution of an
organisation's business functions is Operational risk. Risks arising from the
people, systems and processes through which an organisation operates. Fraud
risks, legal risks, physical or environmental risks are other categories included
under this.
 Process Risk Management: Risky business processes that could lead to
project failure are Process risks.
 Intangible Risk Management: Those risks that are often associated with
damage to the reputation of an organisation or its brand are Intangible risks.

14. RISK MANAGEMENT PLANNING, TOOLS
AND TECHNIQUES
 Time Risk Management: Risks which often involve things connected to time
are Time risks.
 Human Risk Management: Loss of critical employees or knowledge which are
connected to man power are Human risks.
 Legal Risk Management: Losses include government regulations and the same
having an impact on the operations of the company are Legal Risks.
 Physical Risk Management: Physical risks are those loses of physical resources
such as equipment, buildings, land, etc due to natural disasters or man made.

15. EXAMPLES OF POOR RISK MANAGEMENT
 Panama Canal
 Yucca Mountain
 Bank Of America

16. EXAMPLES OF POOR RISK MANAGEMENT
Panama Canal

17. EXAMPLES OF POOR RISK MANAGEMENT
Panama Canal
 In 1880s french businessman Ferdinand de
Lesseps charged forward the canal project
without any risk magamenet or even blueprints.
 Workers piled dirt on each side of the
excavation site which caused the muddy
landscape.
 By 1884 each day approximately 200 workers
lost their lives to the contagious diseases.

18. EXAMPLES OF POOR RISK MANAGEMENT
Yucca Mountain

19. EXAMPLES OF POOR RISK MANAGEMENT
Yucca Mountain
 In 1987 U.S. Government decided using Yucca
Mountain (in Nevada) as nuclear waste depository.
 Government of U.S. not account for protest and
opposition from Nevadans and angered them for
years.
 They spend a little over $13 billion of taxpayer
money on the project.

20. EXAMPLES OF POOR RISK MANAGEMENT
Bank Of America

21. EXAMPLES OF POOR RISK MANAGEMENT
Bank Of America
 In 2012 they begin to charge
customesrs $5 per month just to gain
access to their funds, debit cards.
 Customers dumped the bank and Bank
Of America decide not to take the $5
charge but it was too late.

22. SUMMARY
As a result,
 Do the risk managemenet before start a project or make a move
 Think about everything is possible (be paranoid)

23. Any questions?
Thanks for listening