[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-203387-105":3,"detail-sidebar-cat-0-en-105":81,"doc-detail-203387-en":130},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","the-research-foundation-of-cfa-institute-literature-review-risk-management-a-review-enterprise-risk-management","The Research Foundation of CFA Institute Literature Review - Risk Management: A Review - Enterprise Risk Management","","Risk management is reviewed as an evolving academic and practical discipline, tracing its roots to Markowitz’s portfolio selection work and the later expansion of quantitative risk measurement. The review contrasts portfolio risk management with enterprise risk management, emphasizing that understanding the nature of risk and implementing robust internal controls are essential, not only applying models. It outlines major risk categories—market, credit, operational, liquidity, and legal/regulatory—along with measurement approaches and the properties needed for effective risk measures.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & Report",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/the-research-foundation-of-cfa-institute-literature-review-risk-management-a-review-enterprise-risk-management/203387/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/the-research-foundation-of-cfa-institute-literature-review-risk-management-a-review-enterprise-risk-management/203387.png","ImageObject",300,407,{"name":42,"@type":43},"Sophia Brooks","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-08","2026-09-04",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",8,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"How did risk management develop into an independent field of study?","Question",{"text":63,"@type":64},"Risk management gained independent status over roughly the past 15 years as advances in risk measurement produced new risk measures and integrated frameworks. Its modern study traces to Markowitz’s seminal portfolio selection work.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"What distinguishes portfolio risk management from enterprise risk management?",{"text":68,"@type":64},"Both aim to mitigate risk, but they often use different tools and require different thinking. The review focuses more on enterprise risk management while noting that portfolio risk management literature is already extensive.",{"name":70,"@type":61,"acceptedAnswer":71},"What are the main categories of financial risk discussed in the review?",{"text":72,"@type":64},"The classic categorization includes market, credit, operational, liquidity, and legal and regulatory risk. Each category reflects fundamental differences in the underlying economics and how risk functions are organized in practice.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},203387,1788560485,{"code":4,"msg":82,"data":83},"success",[84,88,92,96,101,106,111,114,119,122,126],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},"Story & Novel",90,"story-novel",{"id":26,"doc_module":4,"doc_module_name":25,"category_name":89,"show_sort_weight":90,"slug":91},"Literature",80,"literature",{"id":33,"doc_module":4,"doc_module_name":25,"category_name":93,"show_sort_weight":94,"slug":95},"Exam",70,"exam",{"id":97,"doc_module":4,"doc_module_name":25,"category_name":98,"show_sort_weight":99,"slug":100},5,"Comic",60,"comic",{"id":102,"doc_module":4,"doc_module_name":25,"category_name":103,"show_sort_weight":104,"slug":105},6,"Technology",50,"technology",{"id":107,"doc_module":4,"doc_module_name":25,"category_name":108,"show_sort_weight":109,"slug":110},7,"Healthcare",40,"healthcare",{"id":55,"doc_module":4,"doc_module_name":25,"category_name":29,"show_sort_weight":112,"slug":113},30,"research-report",{"id":115,"doc_module":4,"doc_module_name":25,"category_name":116,"show_sort_weight":117,"slug":118},9,"Religion & Spirituality",20,"religion-spirituality",{"id":117,"doc_module":4,"doc_module_name":25,"category_name":120,"show_sort_weight":117,"slug":121},"World Cup","world-cup",{"id":123,"doc_module":4,"doc_module_name":25,"category_name":124,"show_sort_weight":123,"slug":125},10,"Lifestyle","lifestyle",{"id":127,"doc_module":4,"doc_module_name":25,"category_name":128,"show_sort_weight":97,"slug":129},19,"General","general",{"code":4,"msg":82,"data":131},{"doc_id":79,"user_id":132,"nickname":42,"user_avatar":133,"doc_module":4,"category_id":55,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":55,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":139,"language":140,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":12,"update_tm":80,"read_time":144},962084925636,"https://ap-avatar.wpscdn.com/davatar_994ba38a5ba835b3df7d355c54d3ed8d","The Research Foundation of CFA Institute Literature Review  \nRisk Management: A Review  \nSébastien Lleo, CFA Imperial College London  \nThe concept of risk has been central to the theory and practice of finance since Markowitz’s influential work nearly 60 years ago. Yet, risk management has only emerged as a field of independent study in the past 15 years. Advances in the science of risk measurement have been a main contributor to this remarkable development as new risk measures have been proposed and theirproperties studied. These measures, which in the past have only applied to market risk, are now being applied to credit, operational, and liquidity risk as well as to portfolio optimization. A growing emphasis on risk budgeting has also sparked a quest for an integrated risk measurement framework. But risk management is more than the application of quantitative techniques. A long list of pastfinancial disasters demonstrates that a profound and concrete understanding of the nature of risk is required and that adequate internal controls are crucial.  \nThe modern study of risk can be traced to Markowitz’s seminal work on portfolio selection.1 Markowitz made the observation that one should care about risk as well as return, and he placed the study of risk at center stage in the new field of financial economics. Since then, the science of risk management has grown and become its own field of study.  \nInitially, risk management was manifest in hedging, that is the elimination of unwanted aspects of risk. Hedging is accomplished primarily through the use of derivatives. (An example would be the hedging of foreign currency risk associated with purchasing foreign currency denominated securities.) In the past 15 years, however, risk management has evolved beyond the practice of hedging and into a complex discipline that revolves around two dimensions: risk measurement and the practice of risk management. The two disciplines are different in their connotations for and applications to the various sectors of the financial industry. For investment banks and commercial banks, risk management is instrumental in managing bank liquidity reserves and regulatory required capital. For active asset management firms, it is a powerful tool for generating more efficient portfolios and higher alphas. These differences reveal that risk measurement and risk management are not fixed ideas but customizable instruments that various firms use in different ways to add value by mitigating the financial effects of possible adverse events.  \nToday, a distinction can be made between portfolio risk management (as begun by Markowitz) and enterprise risk management. Although these two disciplines are closely related through the shared goal of mitigating risk, they often involve the use of different tools and require different ways of thinking. This literature review will discuss both disciplines, but it will tilt toward a discussion of enterprise risk management. An extensive body of literature on portfolio risk management already exists.2  \nThis review will address the following key questions:  \n• What types of risk are financial market participants exposed to?  \n• What lessons can be learned from past financial disasters to improve risk management?  \n• What are the popular risk measures, how appropriate are they, and how are they best applied?  \n• How are credit risk, operational risk, and liquidity risk measured?  \n• What are the desirable properties of risk measures?  \n• Why is the search for an integrated risk management framework important?  \n1 See Markowitz (1952, 1959) .  \n2 See, for example, Grinold and Kahn (1999) .  \n©2009 The Research Foundation of CFA Institute 1  \nFinancial Risk or Financial Risks?  \nFinancial risk is not a monolithic entity. In fact, the classic view of risk categorizes it into several broad types: market, credit, operational, liquidity, and legal and regulatory. This classic view has provided a backbone for the phenomenal developmen","cbCaiakMAgQzxC1j","https://ap.wps.com/l/cbCaiakMAgQzxC1j","pdf",1646550,51,"English","# Risk Management: A Review\n## Overview and key questions\n## Financial risk categories\n## Market risk\n## Credit risk\n## Operational risk\n## Liquidity risk","[{\"question\":\"How did risk management develop into an independent field of study?\",\"answer\":\"Risk management gained independent status over roughly the past 15 years as advances in risk measurement produced new risk measures and integrated frameworks. Its modern study traces to Markowitz’s seminal portfolio selection work.\"},{\"question\":\"What distinguishes portfolio risk management from enterprise risk management?\",\"answer\":\"Both aim to mitigate risk, but they often use different tools and require different thinking. The review focuses more on enterprise risk management while noting that portfolio risk management literature is already extensive.\"},{\"question\":\"What are the main categories of financial risk discussed in the review?\",\"answer\":\"The classic categorization includes market, credit, operational, liquidity, and legal and regulatory risk. Each category reflects fundamental differences in the underlying economics and how risk functions are organized in practice.\"}]","The Research Foundation of CFA Institute Literature Review - Risk Management: A Review - Enterprise Risk Management | PDF",129]