Tag Archives: banking

Why Customer Culture Is Far More Important Than Risk Culture

This is a follow up to an earlier series of articles on risk culture in banks the last of which can be accessed here.

The best institutions and organisations are those which define themselves in terms of how they have they can best serve their customers (and the wider community) and not how they intend to manage risks.

This is a lesson that bankers, regulators and governments all need to learn—the future success of the banking industry depends not on more rules and regulations but how well banks transform their customer culture. As we shall see, that has very little to do with how they measure risk. Continue reading

The Role of HR: To Out The Megalomaniacs?

The top five unlearned lessons of the financial crisis

The above entitled article on Reuters was written by Bethany McLean, one of the authors of the book “The Smartest Guys In The Room”, which eventually became an Academy Award nominated documentary about the wiles of Enron.

The article makes for exceptional reading and is a must for those involved with the banking industry and especially those involved in risk, audit, finance and compliance. I highly recommend it to all. Please use the link below to access it.

The top five unlearned lessons of the financial crisis

Human Risk: The Bond Salesman That Wasn’t

No sooner had I launched a series of articles on Human Risk, the first of which can be accessed here, than I find this amazing story: Continue reading

What Is Your Organisation Doing About Human Risks?

This is the first is a series of articles on human risk.

What is human risk? Do you believe that the management of human risk is important? How important is human risk to your particular organisation? Do you believe that your organisation is doing enough to manage human risk? Is the management of human risk the responsibility of HR or is it more important than that? Continue reading

PRMIA Webinar: Clearing the Bull on the Financial Crisis: Before Placing Reliance on Mathematical Models Banks Should Look at History

Presented by Jonathan Ledwidge, Author

April 18 at 12 p.m. U.S. Eastern Time

The subprime financial crisis is but one of a series of banking-related financial crises that have arisen in the past 40 years. These have included the LDC debt crisis of the 1970s and 1980s, the junk bond crisis of the 1980s, the Japanese asset bubble of the late 1980s and early 1990s, and the dotcom crisis of the late 1990s to 2000.

The webinar will demonstrate how a thorough analysis of each of these crises at the micro level would have enabled banks to avoid the worst of the subprime crisis long before their mathematical risk models exploded. Yet, the micro indicators were not the only warning sign.

Thus during the webinar we will explore how banks could and should have reduced their exposure to the subprime crisis if they had also examined the macroeconomic and geopolitical indicators surrounding each of the previous crises. Finally, we will look at what both these macro and micro indicators tell us about the current risk climate.

Use this link to register for the webinar.

Clearing The Bull on the Financial Crisis – Part I

We can never legislate or regulate our way to sustainable banking—the industry needs to adopt a new strategic business model

Déjà vu All Over Again

“They came on in the same old way and we sent then back in the same old way”.

They were the words the Duke of Wellington used to describe the repeated and futile attempts by Napoleon’s Grand Armée to break through the British defenses at Waterloo.

They can equally be used to describe the current prescriptions for the subprime crisis.

We remain mired in the unenviable position where those who know about banking are firmly wedded to the same old solutions, while those who don’t know about banking i.e. some in the mass media and certain politicians, resort to populist rhetoric. Sadly, the debate on the subprime crisis has generated more heat than light.

It is time for something different. However, before we move forward with a new prescription we need to better define the problem.

Continue reading