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On the White Board - April 2008
Apr 15, 2008
It would be heartening to state that the credit crisis is behind us and that it is time to take stock of what we have learned. But though the crisis continues, it is not too early to start learning. This is the spirit in which the Senior Supervisors Group (SSG), comprised of financial supervisors from five countries, published their impressions of risk management practices through the recent financial turbulence. Chief among the objectives of the group was to identify practices that seemed to distinguish those banks that have, so far, come through the turbulence in the best shape. The result is at once an interim best practices guide and a call to action for banks and service providers alike. As such, we felt compelled to respond to the report (Research Monthly) on the one hand congratulating ourselves for things we have done well and on the other hand pushing that we do other things better. Overall, in the world of statistical measures, we feel somewhat vindicated by the report, in that the specific issues the SSG raises are things that we have at least addressed, and in some cases solved, in the past. For liquidity risk, we have to acknowledge that we all have more work to do, though there are at least some ideas laying around that we should start to implement and gain experience with.