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Report
Baring Asset Management Limited
155 Bishopsgate, London EC2M 3XY
Authorised and regulated by the Financial Services Authority
Tel: +44 (0)20-7628 6000
Fax: +44 (0)20-7638 7928
www.barings.com
Challenges and
Opportunities of Enterprise
Risk Management
SII Risk Forum
9th October 2007
Christopher Forster
Disclaimer

This presentation and the content of these slides are the views and
opinions of the presenter and are not necessarily the views or
opinions of Baring Asset Management Limited.
Challenges and Opportunities
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Opportunity should be seen as the flip side of Challenge

Risk is a relatively new discipline – we are all finding our feet

Risk Regulation is quite new and still developing

Market Practice is evolving

Emergence of new IT solutions in the market place
Vital Components
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Senior Management Commitment and Sponsorship
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Cultural ‘buy-in’ by staff across the organisation

‘Value Added’ output
Challenges
Senior Management Support – they will focus on:

Cost?

Time?
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Value Added?
Challenges
Cultural Buy In

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Surely this is just Audit by another name?
Why should we ‘really’ help Risk – they will only make more work
for us?
How can we help them anyway?
Opportunities
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Risk is here to stay – regulators, management and clients all
have risk on their radar screens
UK is moving towards Principles Based Regulation – it is now
down to us all to get it right – we can make market practice
Risk techniques and practices are not yet so embedded that
we can’t change the shape of our future
There is plenty of data around– but where’s the information
though?
Value Added Benefits

Better understand and measure our risks and controls

Improve our ability to scenario plan
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Enable us to reduce or control our regulatory risk capital

Help allocate capital throughout our businesses
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Aim to make Risk a profit centre
How Do We Do It?

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Central unit or embedded in the business line?
What about Complex/International groups – will there be
greater convergence or more specialisms emerging?

Who does it – what is a risk professional?

How do we distinguish ourselves from other ‘control’ functions?

What do we monitor and how do we gather our information?
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How can we best use IT tools?
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Granular/detailed approach or high level/mission critical focus?
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How do we measure and quantify risks?
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What do we report, to whom and how?
What Next?
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Regulation will continue to evolve
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Regulators and management will become more demanding

The ICAAP and SREP process will establish benchmarks, better
define requirements and market practice
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SYSC will be tested and challenged
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Liquidity risk will move up the radar screen
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Technology will play a much greater part

Companies Act 2006
The End
Or rather, just the end of the beginning?

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