This book provides a comprehensive framework for understanding and managing risk in financial institutions. It covers the activities of banks, insurance companies, pension funds, and investment managers, along with how they are regulated. Key risk categories — market, credit, operational, liquidity, and model risk — are explained with practical models and measurement techniques such as Value-at-Risk and stress testing.
This third edition includes updated coverage of Basel 2.5, Basel III, and the Dodd–Frank Act, with expanded sections on counterparty credit risk, central clearing, and collateralization. End-of-chapter problems and supporting online materials reinforce learning. The book serves as an essential resource for students and professionals seeking to navigate financial markets and strengthen risk governance.