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Risk management in for an overhaul
Super Contributor
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Central banks and regulators can be expected to become more involved when it comes to commercial banking and how banks manage risk.

Legislation going through governing bodies in the USA, UK and Europe are a clear indication of this. What remains unclear is to what extent they will become involved.

The banking environment has become more hostile and one in which the regulators, politicians and company stakeholders have developed a far more intrusive stance.

Paul Hartwell, who is Standard Bank Group’s Chief Risk Officer, elaborated on this today by telling delegates at the Risk And Return South Africa Conference in Cape Town, that this brings about the need for a different type of risk management.

The approach needed is one not focused only on internal control, but one that considers and manages the wider dimensions of enterprise performance, including the protection and development of stakeholder value, Paul said.

He argued for a new risk management paradigm that is more proactive and outward looking: one that can anticipate and then contain the impact of risks on banking operations. It now also needs to accommodate the demands of various stakeholder groups including regulators, corporate executives, shareholders, debt-holders, rating agencies and the general public.
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