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CRO Outlook

Culture & Governance

Building a Unified Theory of Risk Management: How and Why

Our risk management frameworks have not advanced commensurate with the level and trajectory of risk over time. A new paradigm is therefore desperately needed. Take, for example, enterprise risk...

May 13, 2022 | By Clifford Rossi

Credit

Credit Access and Risk: A Balancing Act

The Federal Housing Finance Agency (FHFA) is considering changes to how government-sponsored entities (GSEs), like Fannie Mae and Freddie Mac, apply credit scores in their assessment of mortgage...

April 8, 2022 | By Clifford Rossi

Operational

Is Standard Scenario Analysis Outdated?

When a major risk event unfolds, whether it’s, say, the GFC or COVID-19 or Russia’s invasion of Ukraine, a degree of risk management introspection naturally follows. Financial institutions must...

March 11, 2022 | By Clifford Rossi

Operational

Model Risk Challenges and Opportunities in 2022

Market structural changes, machine-learning techniques and climate risk management initiatives will present some of the most interesting model risk management obstacles and opportunities for banks...

February 4, 2022 | By Clifford Rossi

Market

Risk Management Predictions for 2022: Seeking Alternatives in Times of Uncertainty

Starting this month, Clifford Rossi - a former banking CRO and a current professor at the University of Maryland's Robert H. Smith School of Business - will be taking over as our CRO Outlook...

January 7, 2022 | By Clifford Rossi

Market

How to Select, Monitor and Manage Useful KRIs

In establishing its risk framework, it is likely your organization started with a language of risk. Aligned with each risk in this taxonomy is one or more key risk indicators (KRIs). But what,...

October 22, 2021 | By Brenda Boultwood

Culture & Governance

How to Develop an Enterprise Risk-Rating Approach

A risk taxonomy and risk-rating scales are foundational components of enterprise risk management (ERM). The former gives a firm the ability to pinpoint all of its risks, while the latter allows...

August 20, 2021 | By Brenda Boultwood

Culture & Governance

How to Develop an Enterprise Risk Taxonomy

Every firm needs a comprehensive enterprise risk management (ERM) strategy to identify, assess and manage risks consistently across critical business processes, in all business units. But true risk...

July 16, 2021 | By Brenda Boultwood

Culture & Governance

When Developing a Risk Appetite, Don't Forget Untreatable Risks

How much risk would you be willing to accept to meet your company's performance objectives, if you were a board member of a CRO? Moreover, what types of limits, if any, would you place on...

June 18, 2021 | By Brenda Boultwood

Culture & Governance

Risk Governance: The Importance of Acknowledging Risk

Strong risk governance is about risk acknowledgement, accountability and clear mechanisms for risk-based escalations and delegations. Under a well-built governance framework, acknowledged risk-taking...

May 21, 2021 | By Brenda Boultwood

Technology

Crypto Risk Governance: Hazards and Opportunities

The crypto world is exploding in financial value and investment dollars. A Bitcoin now trades at more than $60,000 in a trillion-dollar market, while non-fungible tokens (NFTs) sell for millions. But...

April 16, 2021 | By Brenda Boultwood

Culture & Governance

How to Use Regulatory Change and ERM to Improve Business Performance Management

For the largest banks, the Federal Reserve recently finalized rules that will impact stress tests, capital buffers, regulatory reporting and loss-absorbing capacity. In lieu of reporting certain...

March 19, 2021 | By Brenda Boultwood

Operational

Geopolitics: Risks and Opportunities

Whether we're talking about the U.S.-China trade war or Brexit or climate change or the COVID-19 pandemic, the events of 2020 have highlighted that it's impossible to separate geopolitical and...

February 19, 2021 | By Brenda Boultwood

Culture & Governance

Top 6 Banking and Risk Management Predictions for 2021

It's all things digital for financial services. The COVID-19 pandemic has accelerated the pace and acceptance of change in financial services, and new methods of banking and managing risk will...

January 15, 2021 | By Brenda Boultwood

Technology

How Artificial Intelligence Will Change Qualitative Risk Management

The earth is trembling below the feet of the chief risk officer, who is now facing huge risk assessment and risk integration challenges. While there are no simple solutions, artificial intelligence...

December 18, 2020 | By Brenda Boultwood

Technology

How Artificial Intelligence Will Change the Way We Manage Compliance

Ahead of the recent U.S. presidential election, regulators doled out billions of dollars in penalties to several large banks, shining a clear spotlight on risk management and compliance failures. It...

November 13, 2020 | By Brenda Boultwood

Culture & Governance

Pandemic Challenges: How AI Will Change Risk and Compliance

Technology in risk and compliance has, to date, yielded limited success, even after many millions of dollars in investments. But, as more financial institutions adopt artificial intelligence (AI),...

October 16, 2020 | By Brenda Boultwood

Operational

Pandemic Challenges: How to Balance Resilience and Profitability

Pre-pandemic, higher corporate profits were often delivered by under-investing in internal controls and minimizing any operational process redundancy. During the pandemic, inadequate redundancies for...

September 18, 2020 | By Brenda Boultwood

Operational

People Risk: A Post-Pandemic Management Framework

COVID-19 has forced businesses to rethink the way they treat and manage employees. Considering the work-from-home strategies adopted by many firms and the general economic decline, there is now an...

August 21, 2020 | By Brenda Boultwood

Operational

The Unconventional Skills Chief Risk Officers are Now Seeking

Prospering in the new normal will require a keen focus on the customer and risk management team skill sets that enable organizational agility. Business managers decide daily the risks that are worth...

July 17, 2020 | By Brenda Boultwood

Culture & Governance

Transformational Risk Leadership in Turbulent Times: How to Address Modern Problems

Brenda Boultwood Many of us grew up thinking of all the places we could go and the problems we could solve, a la the main character in Harold's purple crayon. Harold's special crayon allowed him to...

June 12, 2020 | By Brenda Boultwood

Culture & Governance

The Risk Governance Power Structure: How Does it Work?

Whether in good times or bad, risk-taking is how companies generate earnings. In times of crisis, the effectiveness of response determines an organization's agility and resilience. If corporate...

May 15, 2020 | By Brenda Boultwood

Culture & Governance

Integrated Risk Management: Driving Corporate Sustainability in a Post-Pandemic World

Times get tough, life eventually settles to a new normal and we plow on. It's now time to rethink how we should work, rather than continue to navigate within the old construct. Looking ahead, in the...

April 17, 2020 | By Brenda Boultwood

Market

Pondering Pandemics: Can We Get Better at Responding to Systemic Risks?

An economic system balances in a seemingly precarious equilibrium. It is not unusual for a CRO to be asked how his or her organization will be impacted under a variety of circumstances, including...

March 20, 2020 | By Brenda Boultwood

Culture & Governance

How to Design an ERM-Friendly Risk Data Architecture

Many organizations now have a chief data officer or “data czar(ina).” Organizations increasingly want to be data driven, and change company culture to value data in the same way they would, say,...

February 14, 2020 | By Brenda Boultwood

Culture & Governance

Top 5 Risk Management Predictions for 2020

Brenda Boultwood On the heels of ushering in a new decade, it makes sense to reflect on not only how far we've come but also where we are headed. While risk management is perhaps not completely...

January 10, 2020 | By Brenda Boultwood

Culture & Governance

How to Design and Build an Integrated ERM Framework

Recent scandals involving Australian and UK banks leave little doubt that we must design integrated enterprise risk management (ERM) approaches that weave “common sense” into decision-making. When...

December 20, 2019 | By Brenda Boultwood

Market

Repo Crisis Sheds Light on Short-Term Funding Markets

In September 2019, when a shortage of short-term fund supply caused the repo interest rate to soar, Fed intervention was required to keep it under control. At the time, some wondered if this event...

November 8, 2019 | By Brenda Boultwood

Culture & Governance

How to Build a Well-Understood Risk Management Program

[Editor's Note: This month, GARP is transitioning from Cliff Rossi to Brenda Boultwood as our CRO Outlook columnist. We'd like to thank Cliff for all of his thought-provoking contributions, and also...

October 18, 2019 | By Brenda Boultwood

Culture & Governance

Risk Management Reflections and Lessons for the Future

Having had a front-row seat to the excesses of the boom that fueled the financial crisis of 2008-2009, I've been asked over the years what suggestions I have for current and future risk managers in...

September 27, 2019 | By Clifford Rossi

Culture & Governance

Comprehensive Reform Is Needed to Reduce Mortgage Risk

The conservatorships of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac - one of the last major unresolved matters of the financial crisis - have recently received heightened...

August 16, 2019 | By Clifford Rossi

Market

Will Shadow Banking Cause the Next Financial Crisis?

Policymakers, regulators and bankers were jolted from their collective complacency over the impact of nonbank companies on the financial system with Facebook's announcement of its Libra digital...

July 19, 2019 | By Clifford Rossi

Market

How to Better Understand and Manage Natural Disaster Risks

While the start of summer has many of us thinking about vacations and outdoor activities, it also kicks off hurricane season, along with the onset of other severe weather-related patterns....

June 14, 2019 | By Clifford Rossi

Credit

How to Prevent Another Crisis: Mitigating the Risk of Nonbank Mortgage Lenders and Servicers

During the financial crisis, hundreds of nonbank mortgage lenders and servicers went bankrupt. In the decade since, they have enjoyed a renaissance of sorts. Clifford Rossi The rise of nonbanks in...

May 9, 2019 | By Clifford Rossi

Credit

Mortgage Risk: Why We Should Eliminate the Debt-to-Income Ratio Limit

The Qualified Mortgage (QM) rule is a good example of well‐intended but poorly designed policy. QM came about as part of the Dodd‐Frank Act to address serious issues during the mortgage boom...

April 18, 2019 | By Clifford Rossi

Credit

How to Reduce Risk from Credit Reporting Companies

The recent Congressional hearings on U.S. credit reporting companies (CRCs) put the spotlight again on a corner of the consumer credit market sorely in need of market and regulatory reform. A...

March 15, 2019 | By Clifford Rossi

Culture & Governance

Risk Management Lessons from the Wells Fargo Report

Clifford Rossi In response to a string of high-profile risk management incidents experienced over the last several years, Wells Fargo recently released its Business Standards Report, summarizing its...

February 15, 2019 | By Clifford Rossi

Technology

Strategic Risk Will Be Front and Center in 2019

Blame it on indigestion from all the holiday feasting recently that's left me more pessimistic heading into the new year, but 2019 appears to be one of the most perilous in decades in terms of...

January 18, 2019 | By Clifford Rossi

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