Financial Risk Management

RUNNING HEAD: FINANCIAL RISK MANAGEMENT
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Financial Risk
Management
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Financial Risk Management
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Table of Contents
Introduction......................................................................................................................................2
Risk Management Framework.........................................................................................................2
Risk Identification...........................................................................................................................4
Risk Measurement...........................................................................................................................5
Risk Management Strategies...........................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

Financial Risk Management
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Introduction
Telstra is an Australian company operates in Telecommunication networks and offers mobile,
pay television, internet access and many other services and products in telecommunication
segment, out of that some products are sell worldwide and mainly company covers Australian
market. In 2011, company launched a new brand identity. Suncorp limited deals in all the
finance, banking and insurance products in Australia. Suncorp covers all the areas that include
life insurance, commercial insurance, general insurance, banking, business banking, agriculture
banking and health insurance and offer their products and services to New Zealand and
Australia. It is considered as the largest insurance and banking organization in Brisbane,
Australia. This report focuses on the framework of risk management in these two companies and
strategies and measurement techniques used by these companies to understand the concept of
risk management in practical situation.
Risk Management Framework
Risk management is taken as the “ultimate practice of economic value in an organization by
using risk management instruments” so risk can be managed and risk includes credit risk,
liquidity, market risk, operational risk, exchange rate risk and stock rate risk.
Telstra risk management framework is developed to overcome the types of risk that
telecommunication industry face in Australia and types of risk includes market risk, credit risk,
liquidity risk, operational risk and regulatory risk. The company has a risk management
framework that manages all the risk of the group, “the framework aligns with ISO 31000:2009,
the International Standard for risk management” and includes a set of components for
monitoring, designing, reviewing and implementing risk management in Telstra. The company
follows a three line accountability model for risk management that includes firstly business
stakeholders who are liable to identify and manage the risks, secondly, risk management teams
and Chief Risk Officer (CFO) who are liable for risk framework and monitoring and lastly,
internal audit are responsible for providing assurance on internal processes and risk management
(Telstra, 2019).