Hi.
I'm Jim Wiener, Chief Risk Officer for BNY Mellon.
Today I'm going to talk about the different types of risk in financial
services and how BNY Mellon anticipates, manages, and mitigates risk.
There are many types of risk.
At BNY Melon, we analyze each type and determine which risk we can and
should avoid, the types of risks we can avoid, and
the risks that are part of our business.
Regardless, we need controls in place to ensure that we minimize and
mitigate these risks as much as possible.
Let's look at credit risks, which relates to how clients manage their finances.
We perform due diligence and check a range of variables before working with a client.
This includes looking at their trading history, credit rating,
and even the locations where they do business.
Once we start working together, we continue to manage our exposure by setting
limits and maintaining strong controls over our interactions.
Yet unforeseen events occur and losses do happen, so we need to manage and
mitigate risk, something every business does.
We have rigorous procedures to control risk and manage our assets and
our clients' assets as safely as possible.
We ensure client money is separate from our own and
that our clients' assets are segregated from each other's.
We enforce strict levels of accuracy and attention to detail in
all of our operations with a proactive view in identifying emerging risks.
And we have stopped transacting in financial derivatives,
which are widely considered to be the riskiest securities.
During this course with the University of Melbourne,
you'll learn about the value of accurate and objective accounting standards and
calculating the value of a business by understanding a balance sheet.
You also know that calculating a fair value in a moving market is
quite challenging.
With this new knowledge, you can understand how companies bring
market participants together while helping them to assess and mitigate risk.