Reputational Risk in the Universe of Risks: Boundary Issues

Hema Parekh

INTRODUCTION

This chapter highlights the interconnection between various risk types, such as credit, market, operational and reputational. Its purpose is to explain these interconnections and how various business operations impact reputational risk. By providing specific examples of commonly observed losses and events, the author has sought to increase awareness about reputational risk among risk managers. Whether you are in the camp that believes that reputational risk is a distinct risk category or in the camp that believes it is an impact of failure to manage one or more risks, there is no argument that it is something that all risk and business managers have to consider in everything they do.

Reputational risk is integrated into every aspect of banking and therefore highly correlated to other types of risk. The interconnection between reputational risk and the universe of other risks has become complex due to the quickly evolving technological revolution and globalisation in banking. This is an appropriate moment for a closer look at the issues emerging from this revolution to help increase understanding and management of reputational risk.

THE UNIVERSE OF RISKS

Risk

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