Foundations and Core Risk Models with Excel

Foundations and Core Risk Models with Excel (VOL 1) - I introduces a practitioner-oriented methodology for implementing core risk models entirely in Microsoft Excel. Designed for finance professionals, auditors, regulators, and students, the book bridges the gap between quantitative theory and spreadsheet-based execution under real-world constraints.

This volume focuses on foundational concepts such as value-at-risk (VaR), volatility estimation, and the integration of risk factors into financial statement analysis. Using transparent Excel formulas and templates, readers can build, test, and deploy robust risk models that are auditable and adaptable across various financial environments.

Rather than abstract discussion, each chapter provides a structured path through usable models, accompanied by clear explanations and technical caveats. Key features include:

• Step-by-step construction of VaR models (historical, parametric, and Monte Carlo)

• Volatility modelling using moving averages and GARCH approximations

• Risk-return trade-off analysis and scenario impact evaluation

• Stress testing routines and Excel-based dashboards

• No reliance on proprietary software or complex coding

The book assumes proficiency in Excel and familiarity with financial concepts but no programming experience. Where VBA is introduced, it is provided in context, with full explanation and purpose.

Volume I sets the stage for deeper exploration in subsequent volumes, covering credit, market, liquidity, operational, and model risks. It is not an Excel manual nor a beginner's guide-it is a hands-on resource for those responsible for making risk visible, measurable, and manageable with tools already on the desktop.