Module 2 - Unit 6 Case Studies In Organisational Risk Management Flashcards
List 5 reasons why banks failed in financial crisis
- Lack of risk oversight and challenge
- Weakness of risk functions
- Inappropriate or poorly applied risk appetite
- Insufficient information at Board level and inadequate challenge from Non-executives
- Inappropriate business strategy and failure to link risk strategy leading to overly risky business models
- Over-reliance on risk model output
- Poor risk culture
- Failure of regulatory oversight
- Failure of audit oversight
5 emerging risks faced by banks
- Security risks including cyber attacks
- Health risks such as Ebola
- Weather and climate risks including the impact of climate change
- Political instability and terrorism
- Technology enhancements such as Blockchain
5 emerging risks faced by insurance
Artificial intelligence
Climate change
Cyber
Inshurtech disruption
Regulatory changes
Health risks (Ebola)
Weather and climate risks
Political instability and terrorism
Technology enhancements
Turner Review recommendations
- tighter capital, accounting and liquidity rules for banks
- tighter regulation of international business
- the use of credit agencies and the inf they produce
- remuneration policy of banks
- approaches by supervisors
- risk management & gov structures
What do we mean by emerging risks?
Emerging risk is the term given to new threats or opportunities for an organisation which are currently unknown or are known but unquantifiable or not regarded as current relevant.
Explain the term ‘emerging risk’ and why such risks are important?
Regulators expect that ORSA or ICAAP process to look at the risks that the organisation may face now or in the future. Emerging risks reflect the fact that the risk environment is constantly changing.
Examples of emerging risks:
Security risks
health risks
weather and climate risks
terrorism and political risks
