PwC report critical of bank risk management strategies

Many financial institutions are not managing the full spectrum of risks effectively, according to a new report from PricewaterhouseCoopers and the Economist Intelligence Unit (EIU). The report said financial services companies should re-evaluate their risk management structures in favour of a more practical and holistic approach.

The report, 'Taming Uncertainty: Risk Management for the Entire Enterprise', claimed there is a tendency for risk to be split into the separate areas of credit, market and operational risk. Banks then set up departments to deal with each, rather than accepting that many of these risks are interlinked, according to Diana Chant, a partner in PricewaterhouseCoopers’ Canadian financial risk management practice.

The report said a forthcoming survey of financial institutions showed most respondents are focused on financial, predictable and quantifiable concerns, with credit risk dominating institutions’ thinking. Reputational risk is notably absent from survey responses.

PwC claimed institutions need to follow the lead of some companies that have started to embed risk management throughout the organisation, and look beyond quantifiable risks.

The report recommended that a number of factors need to join together to create the right framework for holistic risk management.

These include board-level management seizing the risk management agenda and making risk management a strategic priority, plus the establishment of procedures to ensure that an awareness of risk filters through to corporate governance, decision-making, external reporting and compensation.

The report also said people and systems must be put in place to deliver risk information to management.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Stemming the tide of rising FX settlement risk

As the trading of emerging markets currencies gathers pace and broader uncertainty sweeps across financial markets, CLS is exploring alternative services designed to mitigate settlement risk for the FX market

Most read articles loading...

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here