First of all we need to introduce the definition of the risk management; it is defined as a scientific approach to the problem of dealing with the pure risks faced by individuals and businesses. It is a function of management in the same style as marketing management, financial management, or personnel management. The organization managers have to response to deal with pure risk, the difference between risk management and insurance management is the manager deals with both insurable and uninsurable risks and the choice of the appropriate techniques for dealing with them. This is why risk management if broader than insurance management. There are four steps of the risk management circle: Identify the risks The risk evaluation Consideration of alternatives and selection of the risk treatment device Implementation of the decision The first step is to identify the risks. Generally, there is a potential risk around us before we do anything, we need to prepare and identify what are they and how are they going to affect us, therefore to dig in to the operation and discover the risks become the key point in this stage. Sometimes it is hard to recognize and generalize the risk of the organization, because there are some differences in operation; difference in the condition of the organization. There always some overlooking important risk exist rather than obviously risk, there are few methods to avoid overlooking risk like systematic approach, insurance policy checklist, risk analysis questionnaires and financial statement. According to the case in banking industry which facing by financial institution, risk is defined as the volatility of a corporations market value which have select as broad as possible, also the decision made by manage will impact on a change in the value of market. This is the concept which optimising the risk reward trade off, different with reduce the risk level. In the operation of banking system, the exposure of bank is systematic such as credit risk. Credit risk: it is refer to risk due to uncertainty in a counterparty's (also called an obligor's or credit's) ability to meet its obligations; and the potential financial loss resulting from the failure of customers to honour fully the terms of a loan or contract, the definition also including the value of risk of loss in portfolio as a result of movement from the higher risk level to lower one. The second step is risk evaluation. Risk manager must evaluate them such as the probability to happen and it is necessary for bank to establish a system to measure the expected and unexpected loss. The risk evaluation requires a ranking system to tell the priorities. This is due to the certain of some certain risks because the possible loss could be much serious and deserve the attention prior to others, this kind of situation could also occur with other risks also requires priorities. If a bankruptcy happened because of liability loss, the net effect would be the same. To classify different levels of risk, itll make the understanding much easier to use descriptions such as critical, important and less important to address different level of risk. Critical risks represent serious exposures which the possibility of loss will result a bankruptcy, so critical risk must be dealt with in the first place. Measure credit risk There are 3 factors that could cause the expected and unexpected loss in a credit portfolio. Firstly, customer default risk is determined by the risk grade profile of the portfolio, the tenor of the exposures and the level of exposure to country risk. Normally the defaults rates are calibrated by different rating agencies. Secondly, loss given default is determined by the degree of security cover, the effectiveness of the work out process and the credit cycle. Thirdly, exposure is the amount that tends to be outstanding at the time of default. This includes current drawn amounts as well as an allowance for contingent liabilities and undrawn lines. The third step is consideration of alternatives and selection of the risk treatment device. After identify and evaluate the risk, we need to think about which approach may be used in to the risk, also which type of technology will be imply in to risk treatment device. When risk management facing the organization, there are always need to consider two approachesrisk control and risk financing. Risk control refer to how to use techniques of avoidance and reduction to minimise the lost of risk. Risk financing focus on use the availability of funds to supply the organization when meet its loss situation also imply the risk control techniques include the tool of retention and transfer. Both risk control and risk financing are alternative approached to dealing with risk also not mutually exclusive. For instance, in the manufactory, risk can be avoided by stop using hazards products by chose another product line. In a funded retention program, the firm will holds the assets in a liquid to against the possible loss which are retained. The case in transferring the risk can be explain in the bank buying the governance bonds which is a risk free assets to transfer the risk. The fourth step is the implementation of the decision. In this stage, the purpose of the decision making is for retain the risk. It may ( or not) achieve either through a reserve or funds, the progress of administration procedure need to be set up in order to help implement decision making. If there is accumulation fun in the plan, to implement the decision have to set up the administration procedure. In the case of bank, to implement the method to adjust the level of risk, we need to make sure the capital amount to the activity, investigate if the two activities acquired the same result from RAROC, therefore can prove whether the decision making under the neutral. Conclusion Risk management has always been a constant problem for banking industry. Risks sometimes turn themselves into real trouble without warning. Even though risk managers have identifies them, but because of lack of activities and right decision havent been made, so many risks are not liquid or clear enough to remove. 2. For (swimming pool) explain how arrangements for each stage of the risk management cycle were applied before the event and how in retrospect they could have better performed? Swimming Pool Risk Management Identify, evaluate the risks. Select the effective way to deal with risks aims to mitigate the hazards and cause of injury. Common critical hazardous areas include the following: Depth of the pool: There should be no diving unless a depth is recognized and accepted by a state's health department. Diving: Follow new dive-block depth recommendations (at least eight feet) and implement structural changes to accommodate them, such as modifications to diving boards or timing systems. Signage: Have enough of it and provide direction on what visitors should and should not do as well as point out hazards. Essentials include: "No Diving" signs where necessary, pool capacity signs, emergency signs, proper CPR instructions and pool rules. Diving board maintenance: Check that the board has enough "grit" to make it nonslip and that bolts and side rails are intact. Also make sure stairs are cleaned regularly and are not slippery. Decking: Install "No Running" signs on deck. The deck should have a splash or wet area. For zero-depth pools, ASTM is now in the process of developing safety standards, which will include decking specifications. In addition, the widespread use of sunscreens applied frequently and often haphazardly, can result in slick spots from their oils. Stay aware of what areas can become slippery from oils and lotions and place appropriate signage in those areas, which are often the steps into the pool, gutter systems and outside showers. Locker rooms: Display slips caution signs. Many people don't realize that water on the floor creates slip hazards. Also, the advent of camera cell phones has introduced a new privacy issue with regard to locker rooms and images being taken. Signs that state no cameras or cell phones in locker rooms prevent the possibility of any inappropriate (or illegal) picture-taking. LIFESAVING EQUIPMENT: Have the appropriate equipment in accordance with the certifying health departmental agency. Regularly check first-aid kits, back boards, head immobilizers, CPR masks, neck braces, safety hooks, reaching poles, life rings and rescue tubes. RESUSCITATION EQUIPMENT: Have the appropriate equipment in accordance with the certifying health departmental agency and the American Red Cross. NIGHT BARRIERS AROUND POOL: Install them. Failure to provide a fence or cover to secure a pool and prevent access when it's officially closed tempts improper or unscheduled use. Many accidents have happened, including drowning, from swimming and diving at night. Create a team effort that involves all these senses in anticipating and preventing accidents. Encourage all staff to become part of the effort to be safety conscious. Use the right checklists. In the area of risk, it's important to use lists that best match a facility's needs in regard to hazards and safety procedures. Various national associations that offer checklist guidance include the offsite swimming checklist (www.standards.dcsf.gov.uk) and so on. Various equipment manufacturers may also have their own recommended checklists. Adopt the right standards for the facility. Beyond checklists, it's key to clarify what the appropriate guidelines are for a facility. To make the right choices, check laws and regulations mandated by state or local governments, as well as recommendations from various industry organizations like the ones mentioned above. Establish a safety committee to review findings An appointed safety officer should create a committee made up of critical staff, such as the maintenance superintendent, the municipality's or agency's legal counsel, insurance representative, a representative from purchasing and any other staff who may be making decisions that would influence risk. Monitor and report. Audit the risk management performance of the swimming pool. Periodic auditing, or employing an outside safety expert to check for and advice about risk factors, should be part of a facility's policy.