Introduction

Risk is one of the main challenges in finance. Any activity of a bank or insurance company, like any other field of economics, involves a certain degree of risk. Risks can arise, for example, when granting loans, withdrawing deposits, advising on financing, especially corporate financing, or investing money. In addition, management must ensure that employees comply with the company’s rules, as financial risks can occur from legal disputes and reputational damage. In this book, you will learn to quantify, simulate and hedge financial risks. Every bank and insurance company that provides a financial service is required by law to control and manage risks within the framework of quantitative risk management.