Risk Management in Banking - Research Proposal Example

Executive Summary A local community group is scheduled to attend Sydney Marathon in September this year. The group is meant to travel when the race position ends. The report outlines the risk management plan and advice for the group. To ensure safety of the local community group, the trip organizers need to be certain that risk management steps and precautions are undertaken. The trip will comprise of 20 people consisting of 4 people between the age of 60 and 70 years, 2 people aged above 75, 4 children between 6 and 10 years, 6 people aged between 35 and 40 years, and 4 people aged between 16 and 18 years. Apart from people aged above 60 years of age, all the others were fluent in English. This report includes a detailed description of the location and activities of the venue. It also identifies the pertinent legal requirement connected with the jurisdiction. Additionally, it asserts the macro, micro and management of risk context. The second section identifies analyses and evaluates risk connected with the trip (Hopkin, 2010). The risks are analyzed in terms of their location, people and physical environment. Subsequently, the report describes the risk control which includes the management level policy and guidelines needed to manage the risks utilizing options of risk treatment. This includes the prevention, risk reduction, removing and avoiding risk source. 1 2 Risk Context Statement The process outlines the risks that, in case an emergency occurs, would constitute a coordinated and significant response within the outlined procedures and guidelines. It contains the detailed activity and location description, relevant legal needs and the management context of macro, micro and risk (Risk management 2009). 2.1 Activity and Location Sydney Marathon will take place on Sunday 22nd September 2013. The participants will run for 42.195Km The event will start at 7:25am for wheelchairs and 7:30am for normal people. The start line cut off will be 7:40 am. For slower walkers, runners or joggers I will be crucial to be in their right group. The groups will be seeded in reference to their expected finish line. The final start group comprises of all the wheelchairs and Prams. The timing will not be interfered because the timing will record starting time and finishing time. This will allow the group to enjoy the event at their own pace and offer the best possible outcome. Various drink stations will be set up providing services such as water, toilet, elite drinks, GU, and Powerade. The marathon will be held at the Sydney International Regatta Centre. The marathon will celebrate the great outdoors, healthy lifestyle , and active communities. The marathon will consist of marathon, half-marathon. Family Fun Run and Lap the Lake. 2.2 Legal Requirements Sydney marathon has legal requirements in terms of age and distance of participation. The minimum age of the participants either 16 or 18 years of age. There will also be underage children ( those under 16 years). It is therefore recommended for the children to wait until they attain the required age. Although it is quite unknown on the implication of marathon to underage, the experts have recommended them waiting until they attain puberty. Most doctors recommend children to avoid long distance because of trauma and can lead to bone doings. When someone trains for a marathon, it is normally tough mentally and physically, exhausting and time consuming. Therefore, underage it is highly possible to affect someones priorities such as education. Before someone embarks on the long distance/marathon, it is suggested top run 10ks or even 4ks. Therefore, completing the race would be a major boost (Crouhy ,Galai & Mark, 2000). 3 Ages The age categories scheduled to attend the trip are limitless. Those under the age of 18years need the consent of their parents to attend the trip. The age categories scheduled for the trip will be grouped as 18-24, 25-29, 30-34, 35-39, 40-44, 45-49, 50-54, 55-59, 60-64, 70-74, and 75+. The trip will offer the fitness device to those people falling in the underlined categories; 18-24, 25-29, 30-34 and 35-39. The devices for the switch fitness go way past the powerful characteristics for the runners. The activities will suit each member of the group including the aged and the underage (Fight, 2004). The switch up and the Sydney's switch will include activities of groundbreaking that directs the participants if s/he is on target. Consequently, it computes the target the participant need to attain in reaching the running goal. The devices will trap the valuable information like the distance, calories, mark locations, and pace so that the participant can easily backtrack to their beginning point. For those people that cannot run like the aged the switch range entails pre-set profile with lots of activities such as swimming, cycling, and video games for the aged. 4 Macro, Micro and Risk Management Context The study identified some of the areas where the hazard of landslide is high: most residential areas. Residential development on these areas should not be encouraged. The state should not issue building permits or new sub-sectors approved without the backing of comprehensive geotechnical assessment of hazard. The risk management would consider micro and macro topography. Additionally, any slope monitoring information and updated landslide, and any information that support development. In high hazard areas, mitigative works are always very costly. Sydney has various provincial statutes that control residential development. To be specific MoTI is assigned responsibility for approving land subdivisions while the local authority approves and issues building permits and also local zoning. The approving officer considers the land likelihood to landslide subjection. 5 Risk Control This is the last stage of the risk management process and offers the methodology of risk control. After the evaluation procedure, the policy makers or the clients decide if to accept or dismiss the risk or to conduct a detailed research for the risk. The risk analyst for landslide offers the background data or limits that are acceptable as direction to the policy makers (Merna & Thani 2008). The specialist will advise in identifying the options and the risk treatment methods. The options of treatment include: accepting the risk, this involves considering the risk to be within the tolerable or acceptable range. Avoiding the risk requires project abandonment. This involves seeking a site considered to be an alternative or development that the risk that is revised would be tolerable or acceptable. Consequently, reducing the likelihood requires measures of stabilization that control the circumstance initiatives like the groundwater drainage, surface geometry, protective structures, stabilizing structures (London,1968). After implementing the risk becomes tolerable or acceptable and should be consistent with ALARA principles 6 Recommendation Disasters in the past showed that a complete measure of safety cannot be attained. Such risks are termed as residual risk. Landslide impact management and assessment exceeding the design of the event offers information on the residual risk. In case, such a disaster re-occurs, the emergency offers additional safety for the risky population and can lower the cases of casualties. Additionally, local authorities need to take part in operation and installation of prior warning systems, during preparation of evacuation schemes, and training of rescue units. Reducing the consequences requires offering measures of stabilization measures, hazard amelioration, development relocation to a location that is favorable in achieving tolerable or acceptable risk. Consequently, warning and monitoring systems; in some cases monitoring and establishing the warning systems are used in managing risks on a permanent to interim basis. The consequences may be reduced through monitoring and warning systems. Also, the risk may be transferred. This requires another force to accept or compensate for the risk through insurance (Hester & Harrison,1998). Subsequently, postponing the decision is also an option. If the uncertainty is sufficient, it may not be good in making decision on data that is available. Further monitoring or investigation would be needed to offer data for risk evaluation and treatment options. It should be clear that the condition is temporary while more work is still carried out. During this time, the condition is temporary approves though the risk may remain tolerable or acceptable. The cost and benefit of the option are important so that the cost effective solutions that are consistent with the general needs of the customer, regulatory and owner, can be flagged out. Combining the alternatives or options may be proper, especially where large risk reduction is achieved for a smaller expenditure. When the options are prioritizing the selections will be easy. Planning the treatment is used to explain the implementation of the options (Holmes, 2002). 7 Conclusion. The frequency of natural disaster has risen over the past years. It has necessitated a better understanding of vulnerability of human, especially in low-resource setting. The risk factors assessment in the paper compared landslide effect on location, people, and severity. The mitigation measures will help every member of the group avoid the likelihood of the disaster. Therefore, the age categories scheduled to attend the trip are limitless. Those under the age of 18years need the consent of their parents to attend the trip. The age categories scheduled for the trip will be grouped as 18-24, 25-29, 30-34, 35-39, 40-44, 45-49, 50-54, 55-59, 60-64, 70-74, and 75+. The trip will offer the fitness device to those people falling in the underlined categories; 18-24, 25-29, 30-34 and 35-39 as one of the mitigation measures. Appendix I Risk Assessment Sheets Priority 1: Landslide Hazard Step 1 Select an area of operation Services to Clients Safety of Public Events & Programs Staff Volunteers ? ? ? ? ? Equipment Facilities Financial Administration Ethical Accountability Legal ? ? ? ? ? Step 2 Describe the risk exposure: The risk associated with landslide include loss of life and destruction of property Step 3 Detail any facts from records of previous losses, or frequency of occurences, or the testimonial of people involve. The place has had previous landslide. The last landslide occurred three years ago. 9 Step 4 Assess the probability of the risk Type of Control Strategy Tick One Very likely to occur ? Likely to occur ? A resonable possibility to occur ? Unlikely to occur ? Very Unlikely to occur ? Step 5 Indicate what risk controls exist, if any. Type of Control Strategy Yes No Effectiveness Policies ? ? Checklists ? ? Duty Statements ? ? Staff Training ? ? Waivers ? ? Inspections ? ? Maintenance ? ? Contracts ? ? Other (describe) Step 6 Provide an estimate of the maximum financial consequence of the risk exposure: (Tick ALL boxes that apply) Risk of a being fined ($ ) 60,000 Risks of claims for damages through courts ($ ) 40,000 Criminal law exposure ($ ) Staff recruitment costs ($ ) Consultant fees ($ ) Staff retraining ($ ) 10 Consultant fees ($ ) Worker’s compensation ($ ) Repairs of maintenance costs ($ ) Property and equipment loss ($ ) Additional cost of insurance premiums ($ ) Other ($ ) Step 7 Calculate and assess total financial impact of risk exposure Risk of a being fined ($ ) 100,000 Insignificant Minor Moderate Low financial loss Medium financial loss High financial loss Less than $1,000 $1,000 - $10,000 $10,000 - $100,000 ? ? ? Major Catastophic Major financial loss Huge financial loss $100,000 - $250,000 Greater than $250,000 ? ? Step 8 Determine the risk management response Details of appropriate risk management response including cost and timelines Risk control ? Risk transfer ? Risk avoidance ? Encouraged to practice afforestation Risk retention ? 11 Priority 2: Fall Risk Step 1 Select an area of operation Services to Clients Safety of Public Events & Programs Staff Volunteers ? ? ? ? ? Equipment Facilities Financial Administration Ethical Accountability Legal ? ? ? ? ? Step 2 Describe the risk exposure: The risk associated with landslide include loss of life and destruction of property Step 3 Detail any facts from records of previous losses, or frequency of occurences, or the testimonial of people involve. No occurrences of falls have been reported so far. Step 4 Assess the probability of the risk Type of Control Strategy Tick One Very likely to occur ? Likely to occur ? A reasonable possibility to occur ? Unlikely to occur ? Very Unlikely to occur ? Step 5 Indicate what risk controls exist, if any. Type of Control Strategy Yes No Effectiveness Policies ? ? Checklists ? ? Duty Statements ? ? Staff Training ? ? Waivers ? ? Inspections ? ? Maintenance ? ? Gabbions have been constructed. Contracts ? ? Other (describe) Step 6 Provide an estimate of the maximum financial consequence of the risk exposure: (Tick ALL boxes that apply) Risk of a being fined ($ ) 30,000 Risks of claims for damages through courts ($ ) 40,000 Criminal law exposure ($ ) Staff recruitment costs ($ ) Consultant fees ($ ) Staff retraining ($ ) Consultant fees ($ ) Worker’s compensation ($ ) Repairs of maintenance costs ($ ) Property and equipment loss ($ ) Additional cost of insurance premiums ($ ) Other ($ ) Step 7 Calculate and assess total financial impact of risk exposure Risk of a being fined ($ ) 70,000 Insignificant Minor Moderate Low financial loss Medium financial loss High financial loss Less than $1,000 $1,000 - $10,000 $10,000 - $100,000 ? ? ? Major Catastophic Major financial loss Huge financial loss $100,000 - $250,000 Greater than $250,000 ? ? Step 8 Determine the risk management response Details of appropriate risk management response including cost and timelines Risk control ? Risk transfer ? Risk avoidance ? Risk retention ? Install fencing that will block the residual from accessing homestead. Estimated cost: $2,500 Estimated timeframe for construction: 2 days Priority 3: Crime Step 1 Select an area of operation Services to Clients Safety of Public Events & Programs Staff Volunteers ? ? ? ? ? Equipment Facilities Financial Administration Ethical Accountability Legal ? ? ? ? ? Step 2 Describe the risk exposure: The risk associated with landslide include loss of life and destruction of property Step 3 Detail any facts from records of previous losses, or frequency of occurences, or the testimonial of people involve. No previous crime incidents have been reported in the centre, but such cases have been reported recently in the close vicinity. Step 4 Assess the probability of the risk Type of Control Strategy Tick One Very likely to occur ? Likely to occur ? A reasonable possibility to occur ? Unlikely to occur ? Very Unlikely to occur ? Step 5 Indicate what risk controls exist, if any. Type of Control Strategy Yes No Effectiveness Policies ? ? Checklists ? ? Duty Statements ? ? Staff Training ? ? Waivers ? ? Inspections ? ? Maintenance ? ? Contracts ? ? Other (describe) Step 6 Provide an estimate of the maximum financial consequence of the risk exposure: (Tick ALL boxes that apply) Risk of a being fined ($ ) Risks of claims for damages through courts ($ ) Criminal law exposure ($ ) Staff recruitment costs ($ ) Consultant fees ($ ) Staff retraining ($ ) Consultant fees ($ ) Worker’s compensation ($ ) Repairs of maintenance costs ($ ) Property and equipment loss ($ ) 5,000 Additional cost of insurance premiums ($ ) Other ($ ) Step 7 Calculate and assess total financial impact of risk exposure Risk of a being fined ($ ) 0 Insignificant Minor Moderate Low financial loss Medium financial loss High financial loss Less than $1,000 $1,000 - $10,000 $10,000 - $100,000 ? ? ? Major Catastophic Major financial loss Huge financial loss $100,000 - $250,000 Greater than $250,000 ? ? Step 8 Determine the risk management response Details of appropriate risk management response including cost and timelines Risk control ? They have been advised on various treatment measures like avoiding the risk at all cost. Risk transfer ? Risk avoidance ? Risk retention ? 17 References Daily Express' London-Sydney marathon. 1969. London: Daily Express. 007, R. M. 2004. Risk management 3rd ed.. Sydney: Standards Australia International and Standards New Zealand. Bessis, J. 2002. Risk management in banking 2nd ed.. New York: Wiley. Collings, T., & Sykes, S. 2004. Marathon!: The story of the greatest race on earth. London: Virgin Books. Crouhy, M., Galai, D., & Mark, R. 2000. Risk management. New York: McGraw Hill. Fight, A. 2004. Credit risk management. Oxford: Elsevier. Hester, R. E., & Harrison, R. M. 1998. Risk assessment and risk management. Cambridge, UK: Royal Society of Chemistry. ( Holmes, A. 2002. Risk management. Oxford, U.K.: Capstone Pub.. Hopkin, P. 2010. Fundamentals of risk management understanding, evaluating, and implementing effective risk management. London: Kogan Page. London, E. 1968. Daily Express London-Sydney Marathon. London?: Beaverbrook Newspapers Ltd.. Merna, T., & Thani, F. F. 2008. Corporate risk management 2nd ed.. Chichester, England: Wiley. Risk management 2nd ed.. 2009. Englewood, CO: Medical Group Management Association. 21 Read More