02 — Capability · BC-230.30
Financial Risk Management
Measure the enterprise's exposure to currency, interest rate, commodity and counterparty risk, and reduce it to the level policy allows through hedges that are accounted for correctly.
- Hedging
- Market Risk Management
In scope
- Exposure identification and measurement
- Hedging strategy and execution
- Hedge accounting and effectiveness
- Counterparty credit limits
Out of scope
- The enterprise risk framework these risks report into (see BC-130)
- Customer credit risk (see BC-250)
Realized by · 1
Used in · 0
- Not yet placed on a value stream.
Build it · 0
- Nothing in the library points here yet.
Decomposes into · 4
- BC-230.30.10Exposure IdentificationFind and quantify where the enterprise is exposed to currency, rate and commodity movements, including exposures hidden in forecasts and contracts.
- BC-230.30.20Hedge ExecutionEnter into forwards, swaps and options that offset measured exposure within policy limits, with every trade confirmed and recorded.
- BC-230.30.30Hedge AccountingDocument hedge relationships, test their effectiveness and account for them so the hedge and the thing it hedges land in the same period.
- BC-230.30.40Counterparty RiskSet and monitor limits on how much exposure the enterprise holds with each bank and trading counterparty, and act when a counterparty's standing changes.