This module will discuss various aspects of risk management in PDM. This relates to both the management of the debt portfolio (i.e. the determination of the cost-risk preference relating to public sector borrowing) as well as the daily operations of a debt management office (e.g. settlement and operational risks).

The first part of the module will therefore focus on the analytical frameworks and tools available to identify and quantify risk in a sovereign debt portfolio and how a preferred cost-risk profile can be determined and how this feed into a debt management strategy. The effects and management of different types of risks on the debt portfolio (e.g. stress test using market risks, credit risks etc.) will be assessed using both deterministic and stochastic techniques.

The second part of module will discuss operational risks involved in managing a DMO and how to mitigate those risks.