MANAGEMENT

Detailed explanation-1: -Risk appetite is the amount of risk an organization is willing to take in pursuit of objectives it deems have value. Risk appetite can also be described as an organization’s risk capacity, or the maximum amount of residual risk it will accept after controls and other measures have been put in place.

Detailed explanation-2: -Risk appetite represents that list of identifiable risks an organization is prepared to take. For banks, by necessity, most of these are pre-defined – credit, interest rate, liquidity, operational, compliance, strategic, and reputational.

Detailed explanation-3: -Risk appetite is the size of risk a company is willing to accept to achieve its objectives. A company with a high-risk appetite will tolerate a high level of risk and can be defined as a risk-tolerant company. It is likely to invest in high-risk, high-reward investment opportunities.

Detailed explanation-4: -Risk Appetite is the amount of risk, at a broad level, that an organization is willing to accept in pursuit of its strategic objectives. Risk Appetite reflects the risk management philosophy that a Board wants the organization to adopt and, in turn, influences its risk culture, operating style and decision-making.

Detailed explanation-5: -Risk appetite can be defined as ‘the amount and type of risk that an organisation is willing to take in order to meet their strategic objectives’. Organisations will have different risk appetites depending on their sector, culture and objectives.