The Evolution of Enterprise Risk Management in Financial Markets (Market Focus)

This publication has been discontinued on July 19, 2011.

Introduction

Abstract

Overview

Introduction

A successful enterprise risk management (ERM) strategy can help organizations meet the challenges posed by emerging technologies by providing a framework for managers to consider how risk exposures are changing, determine the amount of risk they are willing to accept and ensure they have the appropriate risk mitigants in place to limit risk to targeted levels

Scope

• Discussion of the impact of the sub prime crisis on risk management practices and solutions.
• Looks at the rate of technological change that is being driven by regulatory compliance measures

Report Highlights

The sub prime crisis has caused a fresh look to be taken at credit risk policies and practises. Organisations are revaluating the impact of a series of regulatory changes and endeavouring to leverage investment to enable a truly enterprise wide approach to risk management. The discipline of operational risk is beginning to mature.

Reasons to Purchase

• Gain insights into current risk management trends and practices.
• Assisting vendors in their go to market strategy

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
  • METHODOLOGY
• ANALYSIS
  • Introduction
  • Credit risk failures can precipitate liquidity risk, so model assumptions need to be dynamic
    • Sub-prime crisis background
    • Credit risk challenges: leverage and modeling
    • Credit risk challenges: ratings agencies
    • Credit risk challenges: aggregation and integration
    • Credit risk challenges: knock-on effects
    • Implications for credit risk assessment and pricing
    • Changes to ratings agency policy and practice
    • Modeling
  • Over-reliance on modeling and silo structures prevented the successful aggregation of portfolio risk profiles.
    • Modeling shortfalls
    • Liquidity risk
  • While credit and market risk have driven investment for some time, operational risk is still very much evolving
    • ORM process
    • Communication is key.
  • The growing convergence between IT and risk is being driven by regulatory change
    • Compliance as opportunity.
    • MiFID and RegNMS update
  • Conclusion
• APPENDIX
  • Definitions
  • Extended methodology
  • Further reading
  • Ask the analyst
  • List of Figures
    • Figure 1: Enterprise risk management map
    • Figure 2: The levels of ORM
    • Figure 3: Investment drivers

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