The Cultural Revolution in Risk Management

Frank De Jonghe (), Mark Edelsten () and Isabel Xavier ()
Additional contact information
Frank De Jonghe: Ernst & Young, Postal: De Kleetlaan 2, B-1831 Diegem, Belgium, http://www.ey.com
Mark Edelsten: Ernst & Young, Postal: 1 More London Place, London SE1 2AF, United Kingdom, http://www.ey.com
Isabel Xavier: Ernst & Young, Postal: 1 More London Place, London SE1 2AF, United Kingdom, http://www.ey.com

Journal of Financial Perspectives, 2013, vol. 1, issue 1, 179-187

Abstract: Following much debate among regulators and in society more broadly, it is now widely acknowledged that inadequate risk culture was a key contributor to the global financial crisis of 2007—08 and more recent corporate banking scandals. While there is now a growing consensus that something must be done to address behavioral risks, uncertainty remains around what exactly is meant by “risk culture” and how to “strengthen” risk culture. In this paper, we provide some clarity around the concept of risk culture, and propose a model and approach for assessing and strengthening it. The basis of our model is that risk culture is not static — it can be managed and shaped to provide a competitive advantage, allowing a company to achieve its objectives within the stated risk appetite.

Keywords: Risk Culture; Risk Appetite; Financial Services; Behavioral Risk (search for similar items in EconPapers)
JEL-codes: G21 G24 M14 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:jofipe:0012

Access Statistics for this article

Journal of Financial Perspectives is currently edited by Ms Alina Stefan

More articles in Journal of Financial Perspectives from EY Global FS Institute 1 More London Place, London SE1 2AF, UK.
Bibliographic data for series maintained by Ms Alina Stefan ( this e-mail address is bad, please contact ).