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Good risk management 'essential to avoiding another banking crash'

13 April 2011

Bank chief risk officers have more power within their institutions than they did prior to the economic downturn and this is key if the same situation is to be avoided in the future.

Rick Waugh, Chief Executive Officer of Bank of Nova Scotia and vice-chairman of the Institute for International Finance (IIF), said that a new report from the body showing a greater awareness of the need for robust risk management is welcome, Bloomberg reports.

"Regulation is important, but it has in itself seldom, if ever, averted a banking crisis. What really counts, along with strong supervision, is good risk governance and sound risk management in firms," he added.

According to the IIF study, 90 per cent of bank executives stated that risk managers now have a greater role to play in the running of their organizations and are more powerful than they were three years ago.

A report from the Independent Commission on Banking recently stopped short of calling for large institutions to separate their retail and investment operations.
 
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