ABSTRACT
This chapter provides a survey of the relevant topics as a tool to cut through the jungle of terms, concepts, and available products. It focuses on that part of technology that deals with the identification and quantification of the risks associated with the business that banks do-risk management technology. Of the many sources of risk present within a bank, the chapter focuses on business and investment risks, and their relationship to one another and to the risk management process. Investment risks, which are part and parcel of many banking activities, are those which are a direct result of changes in the value of financial assets. Large money-center banks today rely heavily on borrowings, while smaller regional and community banks still rely primarily on deposits to fund their lending activities. The chapter concludes that an activity contains risk if its impact on corporate goals is potentially negative.
