Risk measurement provides information on the inherent risk exposure and residual risk exposure, and the probability of a loss occurring due to those exposures. When measuring these risk exposure, it is important to consider the effect on the overall risk profile of the organization. The following are the overall risk measurements of Easyterms Ltd.:
Risk Assessment Criteria
Financial Failure | FF |
Misconduct and mismanagement | MM |
Fraud and dishonesty | FD |
Market abuse | MA |
Money Laundering | ML |
Risk Criteria Matrix
IMPACT | High | M | H | H |
Medium | L | M | H | |
Low | L | L | M | |
Low | Medium | High | ||
LIKELIHOOD |
IMPACT ratings in this example represent | ACTION |
High: major in fracture, significant loss, fatal or serious | Avoid |
Medium: minor in fracture, minor loss, few serious or fatal impact | Reduce / Share |
Low: Short term or hardly no loss at all | Accept |
LIKELIHOOD ratings in this example represent | ACTION |
High: likely to be experienced once or twice a year | Avoid |
Medium: may be experienced once every five years | Reduce / Share |
Low: may occur once during a working lifetime | Accept |