After implementation of Solvency II regulations, the landscape of risk managers is further broadening to face emerging new risks that are not captured yet by regulations. Today’s CRO agenda is evolving from complying with regulatory requirements to enhancing the robustness and effectiveness of capital models. The coverage of risks has also been enlarged to estimate capital needs by embedding new risks such as model, franchise, technology, credit and liquidity risks.
Finally, the management of diversification benefits is critical to build a competitive advantage in cost of capital, while also identifying all sources of concentrations, to capture and mitigate the effect of plausible event and systemic risks in investment and underwriting activities.
A way that CROs may deal with this wave of new challenges is by incorporating them in a more comprehensive risk appetite aiming at optimizing performance by risk mitigation, and fostering a risk culture that incorporates unexpected risks in all day-to-day management decisions.
Published on: June 8, 2016
Risk Dynamics has unparalleled experience in model risk management and independent validation. We have supported financial institutions of all sizes, worldwide, since 2004.
Our focus and dedication to model risk and validation services, our independence and benchmarks, combined with our ability to provide unbiased views across regions and regulatory regimes, is unique in the market.