Global risk management survey, eighth edition
Setting a higher bar
Covering 86 financial services institutions, identifies an increased focus on liquidity, counterparty, and systemic risk.
As regulators continue to demand higher quality and levels of capital and liquidity, along with new consumer protection measures, the frequency and intensity of regulatory examinations and enforcement activities have increased.
The Deloitte survey showed that the financial services industry and boards are increasing their focus on risk governance and capital management.
Eighty per cent of financial services’ boards are now actively approving and providing direction on risk policy and risk appetite.
They are demanding more information and clarity on the risks associated with executive decision making, operational processes, and reporting.
Ninety eight per cent of company boards or board-level risk committees regularly review risk management reports. This is up by 10% since 2010.
In Australia, the regulator APRA has proposed that financial institutions set up a Board Risk Committee to provide the Board with an objective non-executive oversight of the implementation and on-going operation of the institution’s risk management framework.
This requirement is outlined in the amended draft Prudential Standard CPS 510 Governance, due to come into force on 1 January 2014 and is reflected in the proposed revised draft wording to Principle 7 of the Australian Securities Exchange’s (ASX) third edition of its current Corporate Governance Principles and Recommendations.