Global risk management survey, eighth edition - Setting a higher bar | Whitepaper
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The global financial crisis has led to dramatic and ongoing changes in risk management among financial institutions around the world. Major regulatory reforms have been enacted with the goal of creating a more stable and transparent financial system. Among the most important developments were passage of Dodd-Frank in the United States, the European Market Infrastructure Regulation (EMIR)3, and issuance of the global Basel III regulatory framework.
These and other initiatives are changing the regulatory requirements for financial services players in areas such as systemic risk, regulatory capital, liquidity, derivatives, proprietary trading, and financial activities with individual consumers.
Although the extent of change has been enormous, regulatory developments thus far seem to mark only an intermediate step, rather than the end, of a period of ongoing change: a higher bar continues to be set for risk management across the industry.
Almost three years after Dodd-Frank and Basel III were first introduced, many specific rules are still being developed. Additional regulatory initiatives that could have important implications for risk management are also being put forward, such as the proposal to centralize supervision for European banks under the European Central Bank.
At the same time, financial institutions continue to enhance their risk management programs by strengthening governance and upgrading their capabilities in such areas as risk management models, stress testing, and risk management information and technology systems.
As a result of these events, risk management continues to experience significant change. To manage the resulting uncertainty, institutions should look for flexibility in adjusting business strategies, business processes, and risk management programs as new regulatory requirements are introduced or new risk issues emerge.
Deloitte’s Global risk management survey, eighth edition, assesses the state of risk management as the financial services industry confronts this new reality. The survey was conducted from September to December 2012: 86 financial institutions from around the world participated, representing a range of financial services sectors and with aggregate assets of more than US$18 trillion.
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