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
ABSTRACT This paper shows that traditional measures of bond systematic risk based on unadjusted past returns have very large downward biases. After we develop an improved method for calculating the market...
ABSTRACT This paper studies the approximation of extreme quantiles of random sums of heavy-tailed random variables, or, more specifically, subexponential random variables. A key application of this approximation...
ABSTRACT Because publicly available measures of deposit runoff risk are scarce, regulators' models to measure interest rate risk in the banking book are based on very coarse assumptions about the allocation...
ABSTRACT This paper analyzes and quantifies the idea of model risk in the environment of internal model building. We define various types of model risk including estimation risk, model risk in distribution...
Sign up for Risk.net email alerts
Sponsored video: MarketAxess
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.