Measuring trading results within a risk-reward framework is no simple task. But Dmitri Gainullin and Marina Loscheva believe that firms can perform an objective assessment of the risks of specific trading activities via the calculation of Actual VaR.

This chapter provides a high-level but thorough explanation of the use of RAROC (risk-adjusted return on capital) and its implementation within a bank. Explanations of the mathematics behind the calculations are kept simple with easy-to-understand examples. RAROC analysis determines the economic capital required for each business line and ... click here for more details.

This chapter provides a very effective and easy-to-read, non-technical introduction to operational risk, its inherent "fuzziness" and the challenges with identifying and quantifying the potential loss associated with it. The chapter begins with a discusion of the definition of operational risk and practical guidance on implementing an operational risk ... click here for more details.