Financial Risk Management (2025)

This new Financial Risk Management lecture series completely replaces my earlier 2021 playlists. The old series required viewers to work through a long sequence of prerequisite mathematics videos before reaching the core FRM material. The 2025 series is rebuilt from the ground up to be accessible from almost any background — whether viewers come from mathematics, economics, finance, or none of these. I introduce all the required mathematics, statistics, and modelling ideas within each topic at the moment they are needed, so learners begin the real subject matter immediately and build the technical tools progressively. Across eight fully updated topics, the series takes viewers from near-zero starting knowledge to interview-ready mastery of modern market-risk management, with complete coverage of banks and other financial institutions and the type of portfolios they need to risk manage, how to measure and hedge or mitigate market and credit risks from different types of instruments, including equities, forex, commodities and derivatives, Value-at-Risk and Expected Shortfall modelling, risk factor identification and mappings, systematic risk concepts, risk aggregation, backtesting internal models and stress testing portfolios, and a detailed treatment of the Basel Accords and the Fundamental Review of the Trading book. Each lecture (from Topic 3 onwards) has an interactive practical Excel-based workbook to illustrate the theory. This is a coherent, end-to-end preparation for advanced undergraduate, postgraduate, and professional learners seeking a rigorous, industry-aligned understanding of financial risk management today. I am an internationally recognised expert in financial risk management, derivatives, digital assets and quantitative methods. I wrote the four-volume Market Risk Analysis series published by Wiley, which is widely used in both academia and industry, and has written additional textbooks and practitioner guides on modelling, trading and risk oversight. My research spans systemic risk, volatility modelling, cryptoasset markets, decentralised finance and financial regulation. Find out more about me at www.coalexander.com List of Contents Topic 1: Introduction to Financial Risk Management 1. What is Financial Risk Management? 2. Financial Assets and Instruments 3. Companies and Institutions in Financial Markets Topic 2: Credit Risk Management 1. Fixed Income Products 2. Cash Flows and Net Present Value (NPV) 3. Credit Risk: Spreads, Rating and Value-at-Risk (VaR) 4. What Drives the Interest Rate Swap (IRS) Market? 5. Credit Derivatives and the Banking Crisis Topic 3: Portfolios, Returns and their Distributions 1. Profit and Loss (P&L) and Returns 2. Normal Distributions 3. Matrix Algebra 4. Statistical Operators 5. Portfolio Holdings and Weights 6. Portfolio Volatility Topic 4: Volatility and Value-at-Risk 1. Defining Value-at-Risk (VaR) 2. Introducing VaR Models 3. Building VaR Models 4. Comparison of VaR Models 5. Creating Time Series of Volatility 6. Scaling VaR to Different Time Horizons Topic 5: Fixed Income Portfolios 1. Cash-Flow Portfolios and their Risk Factors 2. Mapping Cash Flows 3. Value at Risk for Cash-Flow Portfolios 4. Example: VaR for a Gilts Portfolio Topic 6: International Equity and Commodity Portfolios 1. Single Index Model 2. VaR with One Equity Risk Factor 3. Equity VaR with Multiple Risk Factors 4. VaR for International Equity Portfolios 5. VaR for Commodity Portfolios Topic 7: Risk Management for Options Portfolios 1. Introduction to Options 2. The Black–Scholes Model 3. The Greeks 4. Mathematical Background 5. Hedging Options 6. Measuring VaR for an Options Portfolio Topic 8: Capital Reserves for Market Risk 1. Balance Sheets and Capital Reserves for Banks 2. Minimum Capital Ratios for Banks 3. Fundamental Review of the Trading Book 4. Validation of Internal Risk Models 5. Statistical Backtests 6. Scenario Analysis and Stress Testing Portfolios This playlist is designed to support both undergraduate and postgraduate learners, as well as professionals seeking a concise, academically rigorous guide to the core principles of modern financial risk management. It provides a complete, structured pathway through all eight topics of the module. Each topic is delivered across six short videos, with clear explanations, worked examples and practical illustrations in interactive Excel workbooks, drawn from real market data.