Risk Taxonomy

The risk taxonomy primarily supports two key risk framework tasks: to establish a degree of completeness in the coverage of risks, and second, to identify potential linkages between risks factors. The second objective exemplifies Risk Insights ”holistic” approach to risk management.

For an event-driven risk taxonomy to be useful, it needs to be manageable in terms of the number of categories and wide ranging to cover as many causes of events as possible. This means that the taxonomy consists of limited numbers of classes of events that are necessarily broad and imprecise. Event-driven risk taxonomies is the classification used by the Basel Committee. Risk Insights can help your Enterprise-Wide Risk team develop it’s risk taxonomy while the Risk Explorer will help senior management identify important interconnections between risks.