View source for Risk versus vulnerability

{{a|devil|}}Accidents ''will'' happen. Four strategies for coping: three focus on the accident, one focuses on your organisation.
===Accidents===
*'''Dealing with accidents''':
:*Respond to accidents when they happen
:*Limit damage accidents can cause
:*Minimise chance that accidents happen
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|'''Reaction'''
|'''Damage Limitation'''
|'''Avoidance/Prevention'''
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[[Closeout]] <br>
[[Event of default]]<br>
[[Breach of contract]]<br>
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[[Trade monitoring]]<br>
Monitor for [[red flags]]<br>
Regular [[due diligence]]<br>

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[[Have good data]] and [[know your client]]<br>
[[Relationship management]]<br>
[[Credit lines]]<br>
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Chaos<br>
Fog of war<br>
Panic<br>
Urgency<br>
Volatility<br>
Fear<br>
Lack of information: if you are at reaction point, chances are your information was already bad and will now be worse.<br>
Compounding effect of above effects in combination.
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Holistic views: where are the exposures concentrated? Where is market risk concentrated?Where are are margin multipliers thinnest? Are there any concentrations of red flags? Share data across credit, fnancial crime compliance, trading
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Calm <br>
Orderly <br>
Timely <br>
Systematic <br>
Thorough <br>
Inquisitive: the object is not to satisfy yourself that there is no risk but to to identify where ''is'' the risk

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===Vulnerability===
*'''Dealing with your [[organisational model]]''': Assuming accidents ''will'' happen, reduce vulnerability to them. Vulnerability comes in the form of unusual [[concentrations]]:
:*Concentration of energy — in a financial services firm, call this financial risk, or profit-and-loss generators
A:*Concentration of population — different modelsof [[distributed network]]. Compare “hub and spoke” models like airports (fragile — take out a hub and large parts of the system are inoperable) with “multiple-node” networks like the internet (robust — take out a node and everything can flow a different way).
:*Concentration of political/economic power— increases the vulnerability to harm from [[executive failure]].