As financial institutions raise their focus on risk management, most still consider their assessments of risk to be insufficient, according to Deloitte’s global risk management survey.Only 47% considered their institution very effective in managing business continuity/IT security risk. Operational and vendor risk yielded 43% each, and geopolitical risk 35%. This compares with 70-80% for their ratings of market, credit and liquidity risk.
Only 35% of executives reported that their institutions had already implemented an ERM programme, while almost a third (32%) are in the process of establishing one. Where ERM programmes have been created, executives have reported they yielded benefits.
Of companies with ERM initiatives, 75% of executives said the total value of their programmes had exceeded the costs. However, this assessment of value is largely qualitative, as only 4% of executives said their institutions quantify the benefits of their ERM programmes.
“While progress in the area of risk management has been real, a great deal more needs to be done,” said David Myers, investment banking partner at Deloitte in London.
More on Risk Management
Banks hope auto-hedging algorithms will cut costs, boost volumes
Debt has jumped fifty-fold at Eskom as it races to build new power stations
We consider the class of risk measures associated with optimized certainty equivalents. This class includes several popular examples, such as conditional value-at-risk (CVaR) and monotone mean-variance....
Capital allocation principles are used in various contexts in which the risk capital or the cost of an aggregate position has to be allocated between its constituent parts. We study capital allocation...
Sign up for Risk.net email alerts
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
Isda directors warn on fragmentation, access and liquidity - but expect problems to pass
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.