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| Rick Waugh, IIF: taxation is a blunt instrument for controlling remuneration |
Have banks reformed their risk management? Yes, they have, or so bankers themselves claim. They have already made big efforts to ensure that many of the factors that contributed to the crisis will not recur, according to the Institute of International Finance (IIF), the global trade body of more than 375 financial institutions. Last year, the IIF together with Ernst & Young surveyed more than 40 of the largest banks to gauge whether they had acted on the new best practice recommendations made by the IIF in 2008, following Bear Stearns’ collapse. Back then, the IIF provided guidance on improving and addressing risk management, liquidity management, compensation, valuation and transparency in the global financial services industry. In December, when the IIF announced its latest analysis of progress on implementing these best practices, Ernst & Young said the industry had moved quickly to assess shortcomings against best practice and to address them. It added that this work must continue for several years.
Upgrade for risk
One of the key measures taken by banks since September 2008 has been to upgrade the role of the chief risk officer.
