Seminar Report-Dr. D H Fung.Reports Accounting, Finance, SPSS Essay

Seminar Report-Dr. D H Fung
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Organizations around the globe are established with the primary objective of realizing substantial amounts in return from their investments. As such, the owners or members of management in these organizations usually have the responsibility of identifying various avenues and platforms to capitalize and make profits while meeting consumer needs, tastes and preferences. It is essential to note that in light of increased competition in the business landscape, the only organizations that are exhibiting immense growth, productivity and profitability are those that regularly step aside from their comfort zone and take various business-related risks. From the business perspective, high risk opportunities tend to realize the greatest returns and vice versa. Financial institutions such as banks are among the organizations that are continuously involved in taking risks with the hope of reaping huge profits in return. Banks for instance, lend money to people and individuals in some cases without any forms of security or collateral attached to the loans. While banks usually charge high interest rates during such scenarios, they are left exposed because the loans could easily be defaulted and consequently, they fail to recover the funds advanced. Based on that fact, risk management is an essential concept that should be embraced by all financial institutions. The paper will be an examination of a report by Dr. D H Fung that was provided during a seminar that highlighted extensively on the concept of financial risk management with the objective of expounding on ways the ideas and findings could develop more insights of financial markets and their overall application in personal practice.
Part One- Summary of the Ideas, Theories and Observations put forth by Dr. D. H. Fung in the Seminar Financial Risk Management: A Regulator’s Perspective
Dr. D.H Fung conducted on an extensive seminar early during the year on financial risk management. The primary objective of the seminar was to assist banks and other financial institutions learn how to control and manage risks according to the figure below.
Figure 1
The speaker acknowledged that risk taking is a major characteristic in many banks. However, it is vital that these financial institutions find ways to balance between the levels of risks that they are willing to take in relation to the desirable amounts of return they want to achieve. As such, Fung (2020) shared that “An effective risk management that is commensurate with the size and complexity of its operations needs to be in place to help ensure that the risks undertaken are well managed within the bank’s risk appetite and that it achieves the intended results”. From the above statement, risks can be equated to losses and as therefore, banks and financial institutions should take risks that won’t destroy their entire operations. The only way that they can achieve that is through effective risk management. Fung also shared that poor risk management was one of the factors that led to the Asian financial crisis.
The seminar also covered risk management framework of financial institutions as shown in the figure 2 below. According to the ...