Risk NON-Management

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 HR 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.”