Basel II

Risk, an inherent part of business, has been brought to the attention of a wider public audience as a result of a series of events over the past years. These included incidents of fraud, major credit failures, exploits focused on information technology and many others. Media response and public interest have confirmed that risk management is seen as an important priority to maintain public confidence in the international financial system.[Basel II, ITGI Institute]

Within the banking and financial services community, risk, in general, requires categorization to create manageable GRC structures. Risk categories are usually defined along the core business areas found in a typical bank or financial services organization. These risk categories include:

• Credit risk
• Market risk
• Operational risk
• Liquidity risk
• Interest rate risk
• Legal risk
• Strategic risk
• Reputational risk

The Basel Committee on Banking Supervision