Financial Risk Tolerance and Country-Based Pooled Funds (draft for comments)

The purpose of this study is to foster dialogue among CBPF stakeholders around the various aspects of financial risk (appetite, tolerance and thresholds) that arise the in the CBPF context, including those stemming from third party implementing partners operating in remote areas without direct oversight. Questions pursued by the research include: To what degree does the existing CBPF architecture and its consultative management approach allow for enhanced risk sharing among partners—or are financial risks simply being transferred down the fiduciary chain of actors, with the highest risks borne by implementing partners on the ground? How do different CBPF partners perceive risk tolerance (appetite or aversion), and how do these perceptions change depending on one’s position within the fiduciary chain? Is there a shared willingness to consider an explicit risk tolerance policy—would partners agree to an acceptable amount of loss, for instance?