Our risk management framework is designed to minimize our risk and loss. We seek to effectively and consistently identify, measure, monitor, report and control the risk types to which we are subject, including the seven key risk types we face. Risks also may span across multiple key risk types, including cybersecurity risk, climate risk, legal risk and concentration risk. While we employ a broad and diversified set of controls and risk mitigation techniques, including modeling and forecasting, hedging strategies and techniques seeking to balance our ability to profit from trading positions with our exposure to potential losses, we are inherently limited by our ability to identify and measure all risks, including emerging and unknown risks, anticipate the timing and impact of risks, apply effective hedging strategies, make correct assumptions, manage and aggregate data correctly and efficiently, identify changes in markets or client behaviors not historically reflected and develop risk management models and forecasts to assess and control risk.
Our risk management depends on our ability to consistently execute all elements of our risk management program, develop and maintain a culture of managing risk well throughout the Corporation and manage third-party risks, including providers of products and services, to allow for effective risk management and help confirm that risks are appropriately considered, evaluated and responded to timely. Uncertain economic and geopolitical conditions, widespread health emergencies and pandemics, heightened legislative and regulatory scrutiny of and change within the financial services industry, the pace of technological changes, including AI (such as machine learning and generative AI) and quantum computing, accounting, tax and market developments, the failure of employees, representatives and third parties to comply with our policies and Risk Framework and the overall complexity of our operations, among other developments, have in the past and may in the future, result in a heightened level of risk, including operational, reputational and compliance risk. Failure to manage evolving risks or properly anticipate, escalate, manage, control or mitigate risks could result in additional legal, regulatory and reputational risk, losses and adversely affect our results of operations.