risk management essentially is, is the evaluation and monitoring of various
risks in ones life. A bank may choose to evaluate the risk management
of a ceratin user depending on the history or the size of the loan that
the user may be trying to take out. The larger the loan amount the larger
the chance is that the bank will want to assess the risk involved in giving
the user a loan.
How the bank may do this is to get a third party risk management company
to come in and evaluate the situation that the user trying to get the
loan may be in financially. They will probably interview the candidate
for the loan, and run over his finiancial history in order to make sure
that the loan will not be given in vain.
The most likely scenario for risk management would be in the case that
someone wants to take out a loan. The bank will use risk management to
assess the risk that the bank company is taking by giving the user a loan
of a considerable size. And from their findings they will then determine
whether or not the user will be given the loan or not.