Risk Management

Risk concern Practices
Introduction
Goldman Sachs and Macquarie Group are large pecuniary player within the American and international banking industry. Like some(prenominal) other player in the fiscal sector, the two companies are exposed to various risks. These risks are such as; liquidness risks, market risks, credit risks and operational risks. This paper has made comparisons of practices utilise by Goldman Sachs and Macquarie Group in Managing this risks. While Goldman Sachs has formed steal teams to manage the different types of risks, Macquarie Group has taken an integrated nest to managing all the risk that the companion is exposed to.
Risk Management Practices
Liquidity Risk
Liquidity risk refers to risk of loss that originates from measly liquidity position of the company (Horcher, 2010). Most failures in financial institutions occur due to poor liquidity positions. Goldman Sachs has established a finance direction that is in charge of managing the companys liquidity risk (Goldman Sachs, 2011). The committee is responsible for formulating comprehensive livelihood and liquidity policies that will mitigate the company from liquidity risks. unrivalled such policy is maintaining execs liquidity.



The primary objective of Goldman Sachs is to maintain enough liquidity that will give the company enough money rise for its operations. Goldman maintains excess liquidity to meet the cash 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 strategy 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 want to shorten a full essay, order it on our website: Orderessay



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