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In this dissertation we take a closer look at how copulas can be used to improve the risk measurement at a financial institution. The focus is on market risk in a trading environment. In practice risk numbers are calculated with very basic measures that are easy to explain to senior management and to traders. It is important that traders understand the risk measure as that helps them to understand the risk inherent in any deal and may assist them in deciding on the optimal hedge. The purpose of a hedge is to reduce the risk in a portfolio. As senior management is responsible for deciding on the optimal risk limits and risk appetite of the financial institution, it is important for them to understand what the risks are and how to measure these. The simplicity of the risk measures leads to certain inadequacies that can have very negative consequences for a financial institution. If the risk measure does not adequately capture the …