Residual risk

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Residual risk

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Residual Risk

Any risk remaining to an investment after all other risks have been eliminated, hedged, or otherwise accounted. For example, a residual risk to an international shipment may be the part that is not insured by the export credit agency. Some residual risks may not be known during risk analysis, and indeed may not be knowable.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
The changes include a significant reorganization of content, new terms, and more detailed requirements around evaluating residual risks and collecting production and post-production information.
According to him, the on-going reforms by the Bank of Ghana including supervisory vigilance and strict enforcement of prudential regulations, are expected to address these residual risks, restore confidence in the financial sector, and should bolster the capacity of banks to lend to support the growing Ghanaian economy.
The firm added that, "this capital expenditure would not only help control residual risks in not owning major logistic facilities but it is also a good investment opportunity to broaden the Corporation's asset base."
Business ( Article MRec ), pagematch: 1, sectionmatch: 1 "Further, this capital expenditure would not only help control residual risks in not owning major logistic facilities but it is also a good investment opportunity to broaden the corporation's asset base," it added.
Table 1 presents the normalized residual risks for [TVaR.sub.p] and different values of [rho] and n.
Analysts hired by the central bank said, 'There are some residual risks that the governor and board should understand, namely that Bangladesh Bank network is still not secure, and there exists a possibility of malicious acts by hackers.'
According to the report, Aircastle and Fly have sold older aircraft and invested in newer models, reducing the residual risks of obsolescence and declining demand.
"Even after risk control measures have been applied, some residual risks remain," the bank said in the document.
Birchall says “The critical issue is risk mitigation, not insurance; the buying of insurance is for residual risks and only after the strategic risk management process.” The resulting benefits include increased life safety, increased production sustainability, increased risk awareness (by employees, site management, the C Suite and Directors), reduced operating costs and reduced insurance premiums for the life-of-mine, via “risk-based” decision making.
It is clear that, whilst most risks can be mitigated against there are a small number of significant residual risks that have been identified.
"Federal Reserve staff are actively considering additional measures that could address these and other residual risks in the short-term wholesale funding markets," she said.