8 de outubro de 2023 Cristiano Silva

Three Lines of Asset and Risk Management for the Energy & Resources Industry

The Energy & Resources industry is heavily dependent on assets, and the businesses that manage them are often confronted by regulatory compliance in the form of environmental, safety and safety concerns in addition to aging assets, maintenance issues, and budget limitations. Each of these aspects could have a significant impact on the operational, external and strategic success of an organization.

A well-rounded risk management strategy is crucial to protect against these risks and ensuring that the official site company continues to meet the demands of its clients. This article will highlight the key areas of asset and risk management:

Counterparty risk management is a method that focuses on making sure key relationships, including prime brokers and counterparties to derivatives, clearing banks, and custodians, are creditworthy. It is also a part of failsafe methods that are designed to safeguard against reputational and financial damage should the partners fail. This is done by vetting suppliers and ensuring that the approval process applies not only to the vendor, but also to the specific service they provide.

Market risk is a possibility of decline in portfolio value. Both asset managers and risk management are concerned about this, but from different perspectives. Portfolio managers are focused on managing their market exposures to minimize unintended market and factor bets, whereas risk managers seek to manage overcrowded leverage and trades, and to monitor liquidity, expected volatility and cash flow.

A solid asset and risk management program can help a company avoid unexpected challenges and maximize the value of its assets. The three lines of defense governance framework is a successful method for identifying and reducing the risks that can affect the performance of an organization.

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