Once it has been taken on that risk management implies management, that a risk management programme includes a change of culture, and that a risk management programme is better launched when setting up the company, we can figure out that such critical aspect as strategic risk management can at best be re-patched as the company goes along. Which is, unfortunately, the fate of many a bank. Hence launching successive risk management projects without having set up the right enterprise-wide prerequisites is doomed to failure, often disguised as re-scoping.

In this webinar, we guard about the regulation-induced necessities to go on project after project for confirming what was known before, while unknown other risks can go wild because the enterprise-wide risk is ill-managed, human risks are just unknown, and some risks are left to specialists without a thorough view at the bank-wide operations. We then indicate what a full-blown risk management programme could entail in terms of investigations and reviews.

Finally, we tell about a few of the benefits that can be derived from such a program, including the possibility to profitably go for more risky activities, to better guard against tail risks and to get to a better understanding of a bank’s risk appetite.

The number of reputable and seemingly well-managed banks having, in recent history, suddenly revealed large losses, out-of-control risks, management overlooking critical areas and other mishaps is quite rich, and probably underestimated. A bank-wide risk management programme can address these inconveniences before too late, provided no sacred cow is left untouched, no thought is spared about what could go wrong, and lessons from the past are not forgotten.

It is all too easy, when working in a highly structured environment such as a bank, to think that risks are known in some other department, that management would have taken care of all of it, and that hearing the music playing is more of a priority than looking for what can go wrong.