Course Overview

This course introduces the fundamentals of risk management in financial institutions, combining theoretical foundations with practical applications, current regulation, and industry practice.

The objective is to provide students with a broad understanding of the principal financial and non-financial risks faced by financial institutions, the approaches used to identify, measure, monitor, and manage those risks, and the regulatory environment in which financial institutions operate.

Learning Outcomes

After completing the course, students should be able to:

  • Understand the risk management process, including risk identification, measurement, monitoring, control and management.
  • Identify and explain the principal risks faced by financial institutions, including market risk, credit risk, operational risk, liquidity risk and interest rate risk in the banking book, as well as other relevant risk categories.
  • Explain how international financial regulation, particularly the Basel framework, influences risk measurement, risk management and capital requirements.
  • Apply key risk concepts and analytical tools to practical problems and interpret their results in a financial-institution context.
  • Critically assess risk information, assumptions and methodologies when supporting financial and risk-management decisions.

Teaching Approach

The course is designed to provide a clear and structured introduction to concepts that can otherwise appear highly technical or abstract. Its objective is not only to explain the fundamental principles of risk management, but also to help students understand how those principles are applied in practice.

Teaching therefore combines theory with practical exercises, real-world cases, project work, practitioner insights and guest lectures. Particular emphasis is placed on understanding the economic intuition behind methodologies, interpreting results, and connecting quantitative techniques with actual risk-management and regulatory decisions.

The aim is to develop both technical understanding and professional judgement, focusing on the concepts, applications and implementation issues that are most relevant in practice.

Prerequisites

No prior specialist knowledge of risk management is required. The course is designed for students with a basic background in algebra and statistics and follows a gradual and structured approach.

Students will progressively develop the analytical tools required to understand and apply the principal concepts used in finance, risk management and financial regulation.

Relevance and Career Preparation

Risk management has become a central component of financial institutions' management and governance. Financial markets, technological innovation, emerging risks and evolving regulation continuously change both the risks institutions face and the methods used to manage them.

A solid understanding of financial risk management is therefore an important professional skill for students pursuing careers in banking, corporate finance, financial analysis, risk management, investment management, consulting, regulation and compliance.

The course provides the foundation required for both professional application and more advanced study in finance, risk, and financial regulation.

Throughout the course, we place particular emphasis on critical thinking: understanding the assumptions behind models, interpreting results rather than simply calculating them, questioning available information, and making informed decisions under uncertainty.