Market risk is the risk that the value of an institution's positions may rise/fall due to changes in the market value of financial instruments. This may take the form of gains/losses arising from traded or non-traded positions. There are many influences on market positions, but the key drivers are interest rates, equity prices, foreign exchange rates, and commodity prices. This course addresses some key issues associated with market risk in banking institutions: Where does it come from? How can it be measured? What are the difficulties associated with such measurements? A subsequent course will look at how market risk can be managed and the regulatory context associated with this form of risk.
Prior to completing this course it is recommended you undertake:
- Risk - Measurement & Management
This online course forms part of the Intuition short course suite.
Learning objectives
- Identify the typical sources of market risk for a financial institution
- Describe the different types of measurement used for the various forms of market risk
