An Integrated Risk Management Model for Financial Institutions

Financial institutions are affected by various risk factors. With the wide spreading subprime crisis, more and more people are paying attention to risk management. In order to enhance the mechanism, techniques and skills of risk management, this paper firstly describes the traditional models of risk management, then presents an integrated risk management model, which consists of three stages as risk mechanism, quantification analysis system and optimizing decision-making. Next, this paper analyzes the three stages respectively. Lastly, by comparing the traditional risk management models and the integrated one, the paper finds the integrated risk management model creates a new approach for risk assessing and calculating to achieve the expected profits.