理解风险偏好risk appetite vs. 风险容忍度risk tolerance

• COSO ERM Framework

  ERM means Enterprise Risk Management.

  From COSO ERM Framework, it defined risk appetite as ‘the amount of risk, on a broad level, an organization is willing to accept in pursuit of stakeholder value’

  In their Strngthening Enterprise Risk Management for Stratefic Advantage, COSO said :

  “An entity should also consider its risk tolerances, which are levels of variation the entity is willing to accept around specific objectives. Frequently, the terms risk appetite and risk tolerance are used interchangeably, although they represent related, but different concepts. Risk appetite is a broudbased description of the desired level of risk that an entity will take in pursuit of its mission, Risk tolerance reflects the acceptable variation in outcomes related to specific performance measures linked to objetives the entity seeks to achieve.”

• notions

  • Risk attitude: organization’s approach to assess and eventually pursue, retain, take or turn away from risk
  • Level of risk: magnitude of a risk or combination of risks, expressed in terms of the combination of consequences and their likelihood
  • Risk criteria: terms of reference against which the significance of a risk is evaluated
  • Risk evaluation: process of comparing the results of risk analysis with risk criteria to determine whether the risk and/or its magnitude is acceptable or tolerable
  • Risk appetite: amount and type of risk that an organization is willing to pursue or retain
  • Risk tolerance: organization’s or stakeholder’s readiness to bear the risk after risk treatment in order to achieve its objectives

  

  风险偏好，是为获取特定收益愿意承担的风险；

  风险容忍度，是可以承受的风险极限。

• Reference

1. What is risk appetite and how does it differ from risk tolerance?