Risk Management

The terms

• Swiss Cheese Model

  The Swiss cheese model explains accidents by treating every safeguard as having weak spots. Harm follows only when the weak spots in several safeguards happen to coincide.

  Subdomain: Risk Fundamentals and Frameworks

• Tabletop Exercise

  A tabletop exercise is a discussion-based simulation in which participants talk through how they would respond to a described crisis, to test plans, roles and decisions without disrupting real operations.

  Subdomain: Business Continuity and Resilience

• Tail Risk

  Tail risk is the chance of rare, extreme outcomes that sit at the far ends of a probability distribution and can cause losses much larger than usual.

  Subdomain: Risk Assessment and Quantification

• Third-Party Risk

  Third-party risk is the risk of loss, disruption or compliance failure that comes from relying on an outside party, such as a supplier, contractor, agent or service provider, to deliver goods, services or access.

  Subdomain: Third-Party Risk

• Third-Party Risk Management (TPRM)

  Third-party risk management is the set of policies and processes a firm uses to identify, assess, contract with, monitor and exit external suppliers so that the risks they bring stay within acceptable limits.

  Subdomain: Third-Party Risk

• Value at Risk (VaR)

  Value at Risk is the loss that a portfolio is not expected to exceed over a set period at a stated confidence level, such as 99% over one day.

  Subdomain: Risk Assessment and Quantification

• Vendor Due Diligence

  Vendor due diligence is the review of a prospective supplier's capability, financial strength, controls, compliance record and ethics before a contract is signed, to decide whether the risk is acceptable.

  Subdomain: Third-Party Risk