How should bankers and boards think about risk in an organization?
Over the past two years, dramatic bank failures, declining profit margins and increased credit concerns have heightened the industry's collective anxiety about risk. To clarify that risk and underline exposures, many have searched for short-term or isolated answers, viewing risk in the moment rather than proactively and broadly across their individual institutions and the industry. Many have sought direction from regulators, asking regulatory officials to clarify their primary concerns and provide direction on how to address specific risks. However, the regulators have resisted calls to address any singular risk and have instead suggested that risk should be viewed broadly and holistically, while bankers should tackle whatever risk is presented.
