Lesson 4: Scenario Analysis: Simple Method for Quantifying Rare Events
Scenario analysis is critically important in risk, both for management and measurement. Quantification of rare events does not have to be guess-work and does not necessarily require heavy quantitative background. The Lesson explains how, in a few simple steps, scenario assessment can be decomposed into a useful discussion about exposure, control layers and points of failures, for better mitigation and more robust quantification.
Lesson 4.1: Scenario identification
- Definition of Scenario Analysis
- Challenges and Uses of Scenarios
- Regulatory Requirements
- Six Steps of Scenario Analysis
- Running a Scenario Generation Workshop
Lesson 4.2: Scenario assessment
- Elements of Assessment
- Delphi Technique
- Fault Tree Analysis (FTA) and Structured Scenarios
- Examples
Lesson 4.3: Scenario validation
- Scenario Documentation Sheet
- Role and Process of Scenario Validation
- Use of Scenario Data in Capital
- Use of Scenario Data in Management