Risk management in financial institutions should take a single view of risk and return, rather than be fragmented across the organisation. This was the topic of a round table hosted by The Banker in New York last month, and summarised here by Michael Imeson.
The global credit squeeze sparked by the US subprime lending crisis has had major ramifications for risk managers in financial institutions everywhere. To what extent were the risk management strategies of US mortgage lenders to blame for the initial problems? How were matters exacerbated by the risk management failings of banks around the world who invested in the collaterised mortgage debts? And how far were the mistakes multiplied by lax risk management throughout the rest of the financial system?
This was the context in which The Banker held a Risk Management Round Table in New York last month for senior risk professionals working in the finance sector. The purpose of the meeting was not to focus purely on the current crisis – though that was obviously on the agenda – but also to discuss risk management in financial institutions in a broader context and how the discipline is changing.
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