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Concentration risk is a banking term describing the level of risk in a bank's portfolio arising from concentration to a single counterparty, sector or country.. The risk arises from the observation that more concentrated portfolios are less diverse and therefore the returns on the underlying assets are more correlated.
DeepSeek just revealed a huge risk to the stock market. Grace L. Williams. January 28, 2025 at 8:36 AM. ... Jason Thomas, is to be mindful of the current concentration risk in markets.
Concentration risk – The risk associated with any single exposure or group of exposures with the potential to produce large enough losses to threaten a bank's core operations. It may arise in the form of single-name concentration or industry concentration.
Each area's (or desk's) concentration risk will be checked [44] [37] [45] against thresholds set for various types of risk, and / or re a single counterparty, sector or geography. Leverage will be monitored , at very least re regulatory requirements via LR, the Leverage Ratio , as leveraged positions could lose large amounts for a relatively ...
China's dominance in widely followed emerging market benchmarks has investors worried about concentrated risks, fuelling demand for indexes that limit their exposure to mainland companies. Global ...
Concentration risk refers to the risk caused by holding an exposure to a single position or sector that is large enough to cause material losses to the overall portfolio when adverse events occur. If the portfolio is optimized without any constraints with regards to concentration risk, the optimal portfolio can be any risky-asset portfolio, and ...
The "tech stock rout was a reminder that there remains a decent amount of headline risk, especially considering that the expectation bar is much higher this year compared to the previous two years ...
It also provides a framework for dealing with systemic risk, pension risk, concentration risk, strategic risk, reputational risk, liquidity risk and legal risk, which the accord combines under the title of residual risk. Banks can review their risk management system.