The Energy & Resources Industry is highly asset-intensive. Organizations who manage these assets are frequently confronted with compliance issues security and environmental threats and equipment that is old maintenance issues, as well as budget constraints. These factors can have an impact on the operational, external and strategic viability of an enterprise.
A well-rounded risk management strategy is vital to safeguard against these threats and ensure that the company continues to meet the needs of its customers. This article will highlight the key areas of risk and asset management:
Counterparty risk management focuses on ensuring that key relationships (such as prime brokers, derivative counterparties, clearing banks and custodians) are reliable and creditworthy, and that includes implementing failsafe procedures that protect against financial loss or reputational damage from the failure of those partners. This is accomplished by vetting vendors and making sure that the approval process applies not just to the vendor https://expertalmanagement.de/2021/06/19/die-vorteile-der-nutzung-eines-datenraums-fur-due-diligence/ but also to the specific service they provide.
Market risk is a potential loss in the value of portfolios. Both asset managers and risk management are concerned about it, however from slightly different perspectives. Portfolio managers concentrate on managing their market exposures to reduce unintended market and factor bets, while risk managers try to manage their crowded leverage and trades, as well as to examine liquidity, expected volatility and cash flow.
A solid risk and asset management plan will help an organization avoid unexpected problems and maximize the use of its assets. The three-line governance framework is a useful instrument for identifying and minimizing the risks that could impact an organization’s performance.