CONTENTS

Preface

Acknowledgments

1 The Basics of Risk Management

2 Risk Measurement at the Corporate Level: Economic Capital and RAROC

3 Review of Statistics

4 Background on Traded Instruments

5 Market-Risk Measurement

6 The Three Common Approaches for Calculating Value at Risk

7 Value-at-Risk Contribution

8 Testing VaR Results to Ensure Proper Risk Measurement

9 Calculating Capital for Market Risk

10 Overcoming VaR’s Limitations

11 The Management of Market Risk

12 Introduction to Asset Liability Management

13 Measurement of Interest-Rate Risk for ALM

14 Funding-Liquidity Risk in ALM

15 Funds-Transfer Pricing and the Management of ALM Risks

16 Introduction to Credit Risk

17 Types of Credit Structure

18 Risk Measurement for a Single Facility

19 Estimating Parameter Values for Single Facilities

20 Risk Measurement For A Credit Portfolio: Part One

21 Risk Measurement For A Credit Portfolio: Part Two

22 Risk-Adjusted Performance and Pricing for Loans

23 Regulatory Capital for Credit Risk

24 Operating Risk

25 Inter-Risk Diversification and Bank-Level RAROC

Glossary

Index