Everyone loves a chief risk officer

Big banks are rushing to hire chief risk officers in the wake of their subprime shocks

NEW YORK – Banks damaged by this summer’s credit crisis are bringing in new chief risk officers in the aftermath of their subprime writedowns.

JP Morgan Chase’s hire of chief risk officer Barry Zubrow closely followed Citigroup’s appointment of Jorge Bermudez in a similar role, and these are just the latest in a series of risk appointments by banks.

Citigroup’s announcement was part of a wider reshuffle of risk management at the company, which included assigning a task force to evaluate how the bank’s risk analysts – like many across the industry – had been so wrong.

These developments indicate the rise of the chief risk officer, a role that has reached board-level status – one of the few benefits of 2007’s market dislocation.

Last year, maritime insurer Lloyd’s released a survey, Taking risk on board – how global business leaders view risk, which showed boards are becoming increasingly aware of the positive role of risk management. Lloyd’s underlined the importance of full integration of risk management, so that it is no longer perceived as a source of constraint but rather as a means of gaining a competitive edge.

US bank Merrill Lynch posted October writedowns of $8.4 billion, quickly followed by the hire of Ed Moriarty as chief risk officer in November. Bermudez’s appointment came days after Citigroup said it would probably write down $11 billion of its subprime assets for the fourth quarter, while Lehman Brothers and GMAC Financial Services have also swiftly followed losses with hires of new heads of risk.

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 info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Financial crime and compliance50 2024

The detailed analysis for the Financial crime and compliance50 considers firms’ technological advances and strategic direction to provide a complete view of how market leaders are driving transformation in this sector

Investment banks: the future of risk control

This Risk.net survey report explores the current state of risk controls in investment banks, the challenges of effective engagement across the three lines of defence, and the opportunity to develop a more dynamic approach to first-line risk control

Op risk outlook 2022: the legal perspective

Christoph Kurth, partner of the global financial institutions leadership team at Baker McKenzie, discusses the key themes emerging from Risk.net’s Top 10 op risks 2022 survey and how financial firms can better manage and mitigate the impact of…

Emerging trends in op risk

Karen Man, partner and member of the global financial institutions leadership team at Baker McKenzie, discusses emerging op risks in the wake of the Covid‑19 pandemic, a rise in cyber attacks, concerns around conduct and culture, and the complexities of…

Moving targets: the new rules of conduct risk

How are capital markets firms adapting their approaches to monitoring and managing conduct risk following the Covid‑19 pandemic? In a Risk.net webinar in association with NICE Actimize, the panel discusses changing regulatory requirements, the essentials…

You need to sign in to use this feature. If you don’t have a Risk.net 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