Risk Management

Risk concern Practices Introduction Goldman Sachs and Macquarie Group are gigantic pecuniary player within the American and international banking industry. give care some(prenominal) other player in the fiscal sector, the two companies are exposed to various risks. These risks are such as; liquid risks, market risks, credit risks and operational risks. This paper has made comparisons of practices practice by Goldman Sachs and Macquarie Group in Managing this risks. While Goldman Sachs has formed appropriate teams to manage the different types of risks, Macquarie Group has taken an integrated nose to managing all the risk that the companion is exposed to. Risk concern Practices Liquidity Risk Liquidity risk refers to risk of deprivation that originates from measly fluidness position of the come with (Horcher, 2010). Most failures in financial institutions occur due to poor liquidity positions. Goldman Sachs has ceremonious a finance direc tion that is in charge of managing the callers liquidity risk (Goldman Sachs, 2011). The committee is responsible for formulating nationwide livelihood and liquidity policies that will mitigate the company from liquidity risks. unrivalled such policy is corroborateing execs liquidity.

The primary objective of Goldman Sachs is to maintain plentiful liquidity that will give the company enough money rise for its operations. Goldman maintains excess liquidity to meet the exchange flow need as well as collateral needs of the company. Another policy that Goldman Sachs has implemented in managing liquidity risks is maintaining a contingency fund. The purpose of maintaining this fund is to enable the company to move to liquidity! crisis or difficult market situation. The finance committee has also used divesture as a schema for managing the companys liquidity. Unlike Goldman Sachs, Macquarie has not established a particular committee that is in charge of managing liquidity risks in the company. Macquarie has a centralized group known as the Risk...If you indispensableness to shorten a full essay, order it on our website: OrderEssay.net

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