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| Friday, November 20, 2009 |
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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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January 6, 2009 4:32 PM ET
The credit crisis may be a year and a half old. But according to a new survey by audit firm KPMG, many bank executives are still struggling to find a seat at the table for their companies’ risk managers. In fact, despite hundreds of billions of dollars in write-downs of toxic assets, most bank executives continue to dismiss risk management. Indeed, three quarters of the risk managers polled said risk management is “stigmatized” at their institution. That group said risk management is seen as a mere “support function”—something akin to human resources or IT. What's more, some 45% of the bank execs surveyed said their boards lacked expertise in managing risk. And barely half said they had senior managers with “deep practical risk management experience” working for their companies. “Risk management programs may have been in place at most banks, but the survey indicates there were shortcomings around the execution of those plans,” said Michael Conover, a principal in KPMG’s Financial Risk Management practice, in a statement. “Financial models don't prevent poor risk decisions, people do.” Nine in ten of bank managers in the poll said they’ve either already reviewed their policies governing how risk is measured, are in the process of conducting such a review, or plan to do so in the future. Nevertheless, just 42% said they have changed their approach to risk as a result. Half the executives surveyed said “lack of risk governance” was a leading cause of the credit crisis. It was the second most commonly cited cause, following “incentives and remuneration,” mentioned by 53% of respondents. And though three quarters of the executives said the financial industry’s woes showed that stricter regulation was necessary, just 36% thought government overseers should play a bigger role in setting compensation. “Stronger regulation alone will not be the solution,” Mr. Conover said in the statement. “Banks are already taking steps to make improvements and fill the talent gaps in their risk management programs, which should go a long way in helping to repair the problems.”
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