Sunny27- I have sat through some of those seminars.
I will add banking risk management involves many things. Financial management in the banking sector involves qualifying banking patrons for various loans.
The bank’s lending criteria is based on underwriting guidelines which is a form of credit risk management. The bank may assess the level of risk based on the customer’s credit profile.
The interest rates may be raised due to a higher risk loan. For example, home equity lines of credit often have lower interest rates because the line is set at a variableinterest rate and the borrower’s home is used as collateral for the loan.
The bank places a lien on the borrower’s home until the borrower pays off the credit line. The bank is lowering its risk with this product because the home equity line of credit unlike the home mortgage is a recourse loan, which means that the bank can seek payment from the borrower even though the borrower may have lost the home due to foreclosure.
In addition, these loans are pure profit for the bank because they are usually interest only loans that do not touch the principle unless the borrower makes extra payments.