Treasury and Risk Management Learning Journal
I have chosen this project because I assumed that I have inadequate knowledge on the subject. In doing so, I could confirm the extent of my learning of the subject and apply in practice. It is of my best belief that that the module functions toward making students functional in terms of putting different learnt strategies into action. With this, I have learned the limitations of an industry particularly the credit industry and the extent to which the interdependence among various industries is so apparent. I came to know that the ‘dark sides’ of risk management which posits that not only adequate risk assessments should be inexistence but they should also be credible and reliable. All risk factors could get worse at the same time, resulting to the perfect storm scenario, and that operational issues [or risks] could affect credit assessments of the consumer portfolio. Anyhow, the tendency of consumers to default or not is a resultant of an ever-changing, complex social and legal systems. I now understand consumer credit encompasses a ‘semi-automated’ decision-making process hence impose more complicated risks which must be given careful attention.
For me, this activity requires the knowledge, patience, persistence and the drive to accomplish something. Through this, I can now consider myself as an effective adult learner who is able to share skills, experiences, independent views, opinions and beliefs to make this activity more meaningful and productive. The process of coming up with the ideas to be integrated in the paper, I realized that it is a needs-based wherein it is not enough that you will apply your own learning but also to learn more through the process. This activity provides me an opportunity to test whether I am capable to function in a real-world setting. With this I say that there are various risks that could threaten an institutions existence, functioning and survival such as interest rate risk and asset valuation risk, and what seems to be critically important are operational and business risks. Nevertheless, there is also a risk that even the long-established institutions should embrace and this is reputation risk. Preserving reputation is very important as it serves the yardstick for delivering promises to customers hence something that is very vulnerable to risk.
As such, the project is also a proactive learning as I need to integrate not just a single concept but a multitude of concepts so that I can provide depth into this activity. Realistic results are my goal and which is reasonably attainable so that it could be acted upon to emphasize its importance. While doing the project, I stumble upon new understanding that challenges my own knowledge like the concept of nature, dynamic and typologies of risk exposure. I learned that I have to process my own learning which can lead me building up the confidence of embracing new ideas. Limitations inherent in this kind of project would include susceptibility from my own subjectivities. I would tend to think that when a firm or institutions fails to respond and address risk inherent to the business, the blame should be placed for ineffective corporate governance which could be always true but realistically, there are also different risk-related failures that could not be solely blamed for such like in the case of interconnected industries.
Competence and expertise to discuss such a complicated issue like this enabled me to match my personal knowledge, skills and attitudes with the peculiar set-ups of various organizations relating with the issue of financial tsunami which include Freddie Mac and Fannie Mae. Because the recent financial tsunami is now shaping how concepts of risk management must be understood and taught in Universities, I came to understand that learning [from the financial tsunami experience] is participatory process and is effective when learning could be transferred. What I am trying to say is that institutions affected are now learning from their own mistakes, which is too costly not just for them but also to the government. Nevertheless, because of what had happened the posterity could benefit from it and hopefully will not commit the same wrongful acts again or in the future.
Although this activity could be very simple for some, the process of understanding what and how did it happened, so profound that it affects the economy of the whole world, is not that simple at all. Such an activity requires the knowledge, patience, persistence and active participation as well as the drive to accomplish the goal. In sum, the learning that could be attained from this activity is two-fold. First, one could learn that risk must be taken seriously, respond and address such promptly and in an effective manner and second, one could learn that in doing the activity, risk must be addressed both individually and collectively.
Credit:ivythesis.typepad.com
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