Risk Manager
In a financial firm, a risk manager is an employee who works in the area of risk management. Individual risk managers may focus on market risk, credit risk, liquidity risk, operational risk, or enterprise risk management.
Large financial institutions have a principal-agent problem when it comes to risk. Decision makers typically have limited downside and unlimited upside, which might lead them to take more risk than their investors and regulators want. At large financial institutions, then, risk management is often primarily concerned with limiting risk.
At hedge funds, risk management may be responsible for limiting risk, but they are more likely to be involved in helping ensure that the portfolio managers are taking the right amount of risk. For more, see How Hedge Funds Manage Risk. Rather than having a full-time chief risk officer, hedge funds with less complicated portfolios may also employ a virtual or outsourced chief risk officer.