Risk management still critical to delivering value
The global financial crisis has shown that risk management is critical both to the success of institutions and to their value to society, Don Abel, Reserve Bank Assistant Governor and Head of Operations, told the Oceania Computer Audit, Control and Security Conference today.
"The global financial crisis exposed the weaknesses of risk management to the world, and especially the inadequacies of institutions that allowed their risk management practices to be subverted by the drive for short-term profitability," Dr Abel told the conference in Wellington.
While better regulation and policy interventions might help to stabilise markets, by aiming to reduce excessively risky decisions, ultimately it was the people involved in the key roles of institutions, their skills and values, that largely determined the future of the enterprises.
"In the current highly volatile and uncertain operating environment, risk professionals have to be able to translate developments into tangible business responses.
"They also have the important job of influencing and guiding others to make the right decisions. By doing so they can deliver value to their institutions and society in these challenging times."
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