Risk Management in the Global Economy

What is risk? Why does it matter, to us and to the financial markets? What are the principles that drive the management of risk? Can we ensure that these principles are implemented wisely?

This free online course will look at risk management in its broadest terms, giving you the opportunity to evaluate the crucial role played by risk in the global economy, both in terms of its opportunities and its potential dangers.

Understand financial investments and the associated risks

With experts from the Centre for Financial and Management Studies at SOAS University of London, you’ll look at practical examples of financial investments, to examine:

• the main functions of finance and of risk management
• the main forms of financial investment, such as stocks and bonds, derivatives, futures and options, hedging and speculation strategies
• how firms hedge risk by using financial derivatives
• how risk management is applied in the financial and in the non-financial sector.

Learn how the financial crisis and emerging markets are changing risk management

The course will explore how finance has changed in recent years, and ask if these changes have resulted in greater systemic risk for the financial sector and for the economy as a whole. By examining concepts such as behavioural finance, we’ll ask if inappropriate risk management has exacerbated the recent financial crisis.

Finally, we’ll turn our attention to new and emerging markets. For example, how is risk managed in Islamic finance? How might common tools alter risk in investment positions in mature markets as well as in the banking sector? And how can firms utilise risk management tools most effectively?

By the end of the four-week course, you’ll be able to:

• understand financial markets and the principles of risk management
• understand the main types of risk and evaluate the methods and tools used by firms to manage risks
• examine ideas and methods used in the analysis of portfolios of financial securities, including stocks and bonds
• explain the use of financial derivatives for hedging (reducing risk) and speculation (increasing risk) in financial markets
• evaluate the application of risk methods and risk management tools in the global economy

The course offers a broad overview of risk, and will be of interest to those looking to better understand financial instruments and their impact on the global economy.

This is a general level course, however some knowledge of economics or finance may be useful.

• Understanding risk management
• Introduction to the world of risk
• Understanding financial markets
• Financial instruments
• Risk and financial institutions
• Closing thoughts
• Measuring and monitoring risk
• Keeping track of risk
• Managing portfolios
• Calculating risk
• Behavioural finance: the rules of the game
• Focus on Islamic finance
• Week 2: Closing thoughts
• How can we reduce risk?
• Understanding derivatives: futures
• Understanding derivatives: options
• Week 3: Closing thoughts
• Applications of risk management
• Monitoring levels of risk
• Understanding yield curves
• How do firms apply risk management?
• Risk: challenges and opportunities
• Week 4: Closing thoughts