From the credit crunch in 2008 to the eurozone crisis in 2011, risk management has never been so topical. This was evident last night, when more than 60 financial services professionals attended our exclusive risk debate at One Moorgate Place.

We were lucky to have some of the City’s most senior risk specialists in attendance, along with a distinguished panel consisting of a leading editor from a well known City newspaper, a senior risk representative from a UK regulatory body as well as a global head of risk methodology from a leading investment bank.  This all led to thought-provoking discussion and some sharp intellectual sparring! Abiding by the Chatham House Rule, I can’t tell you what was said, but here are some of the topics that were discussed. I’d love to hear some of your thoughts as well – let the debate continue…

1. Although numerous causes of the 2007/08 credit crunch have been mooted, many experts feel that the crisis was, “not a natural disaster, but the result of high risk, complex financial products, undisclosed conflicts of interest and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of major financial institutions.”
   
   Why was risk management not able to prevent such a global meltdown?

2. In recent years there has been major regulatory reform across the financial services sector, as well as a huge drive to ramp up risk management frameworks. Barely four years have passed since the last global economic crisis and we again find ourselves in another one, this time on a more sovereign scale with the eurozone crisis.
   
   Having concentrated on developing micro risk management tools, along with more in-depth analysis from a credit perspective, why is it that the macro-level risks were seemingly ignored?

With the new measures in place, do we now feel confident from a risk management perspective, that we are better positioned to recognise signs of an impending crisis? And what are the key areas to be wary of moving forward?

(L-R) Eduardo Epperlein – Global Head of Risk Methodology, Global Risk Management, Nomura, Allister Heath – Editor, City AM,  Michael Wardle – Head of Market Risk and Trading Review, FSA.

2012, Banking, Banking crisis, eurozone crisis, Financial Services, Risk, risk management