Read Why do business professionals choose ready-to-use KPIs? to find out the answers to these questions:
Market risk reflects the likelihood of the value of an investment getting diluted due to the dynamicity of market factors. Types of market risks that are generally recognized are- Equity Risk (possibility of equity prices getting fluctuating), Currency risk (probability of foreign exchange rates undergoing changes), Commodity Risk (likelihood of commodity prices showing change) and Interest Rate Risk (interest rates getting changed).
One needs to monitor the way an organization proceeds in the issue of 'market risks'. This demands a 'measurable' and 'quantitative' approach to be adopted. One of such methodologies is BSC (Balanced Scorecard) that rests on framing of KPIs (Key Performance Indicators) under suitable number of categories.
Such an act is required to devise a potent strategy for effective monitoring of the factors that have a bearing on 'risk prospects'. Once this tool is incorporated into the organizational culture, 'tracking and correction' of problems gets much simplified and fast.
However, to come up with useful metrics and indicators to take forward this 'calculative' act, one has to give a detailed-enough look to the surroundings. After this is done, values can be attached to these to be used for future reference.
This is the actual scorecard with Market Risk Performance Indicators and performance indicators. The performance indicators include: interest rate risk metrics, duration gap model, currency risk exposure, trading portfolio risk metrics, portfolio value adjustments associated with credit ratings, contractual obligations, liquidity metrics, surplus liquid position, net deposit drains.
How is this book different from 796 other book titles about KPIs on Amazon?
"Before writing a single line, I formulated some guiding principles, one of them was: "If our clients ask, "How can I find a good KPI for..." - I want this book to provide a perfect answer."