The sixth edition of Risk Management and Financial Institutions has been fully
updated withmany improvements to the presentation of material. Likemy other
popular book, Options, Futures and Other Derivatives, it is designed to be suitable
for practicing managers as well as university students. Those studying for professional
qualifications such as FRM and PRM will also find the book useful.
There are no prerequisites, except a knowledge of basic statistics. In producing
the sixth edition I re-sequenced the chapters to create a more logical flow of material.
Financial institutions, financial markets, and the management of different types of
risk are now discussed in the first 24 chapters, with the regulation of financial institutions
being covered toward the end of the book. Instructors who do not want to cover regulation
will find the new structure easier to deal with. Those who do cover regulation
will probably agree that students should have a good understanding of the risks first.
There is a new chapter (Chapter 23) on climate risk, ESG, and sustainability.We have
now reached the stage where all companies, including financial institutions, cannot
ignore environmental risks. Increasingly, it is necessary for them to provide information
to investors on the way they are managing these risks. This chapter describes the
nature of environmental risks and the key role that financial institutions can play in saving
the planet.