Top five risk management challenges at global banks

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When respondents were asked to identify the top risk management and control challenges facing their organizations, five themes quickly surfaced and reverberated throughout our discussions. Taken together they form an image of an industry striving to regain its footing in a still-fluid economic and regulatory landscape.

The overwhelming top-of-mind issue – cited by 72% of respondents – is regulatory uncertainty. New regulations are expected to impose restrictions on capital, liquidity, risk management and compensation practices, but how strict they will be and how soon they will take effect remains to be seen. Anticipating and addressing the potential impact of these new rulings on their organizations is a time-consuming and often frustrating task for company leaders.

Altogether, the top five risk management challenges revealed in the survey include:

  1. Dealing with regulatory uncertainty. Multiple regulatory proposals complicate planning as banks anticipate systemic reform.
  2. Anticipating new capital requirements. Stricter regulatory proposals are driving banks to reallocate capital, rebalance portfolios and rethink market strategies.
  3. Shifting the risk culture. Banks are strengthening their risk culture and governance processes with more senior management involvement and reinvigorated risk procedures.
  4. Navigating the fluid economy. Uncertainty about the economy poses a challenge to long-term and short-term planning.
  5. Repairing the balance sheets. Many banks are still dealing with fallout from the economic crisis.


Read the full 2010 annual global bank risk survey report for complete findings.