Philadelphia, PA (October 27, 2003)—RMA—The Risk Management Association and RiskBusiness International Limited announced the expansion of a global key risk indicator (KRI) study at the RMA’s Global Operational Risk Forum 2003 in Paris, France.
The KRI Framework Study is in three parts. Part I, a proof of concept and validation is complete. Seven banks participated: Citigroup Europe, Deutsche Bank, Dresdner Kleinwort Wasserstein, JP MorganChase, KeyCorp, Royal Bank of Canada and State Street. A key deliverable from Part I was an industry risk map that identified the high operational risk points in a typical bank.
Part II, which will create a KRI reference library, has been opened to a wider group of regional and international banks. Each bank that joins the study will help refine the industry risk map and participate in the identification, definition and specification of KRIs for the agreed high risk points.
Charles Taylor, director of operational risk at RMA, said, “Until now, it has been difficult to show how well KRIs work in tracking important risks, and it has been very difficult to compare, aggregate and report on KRIs across institutions. This study will identify new KRIs, foster standardization and comparability, and boost effective KRI use in the participating financial institutions.”
Jonathan Davies, managing director, Americas, at RiskBusiness, said, “We plan to release KRI definitions for high risk points starting in the spring of 2004, with detailed specifications following in the summer. Participants will be able to use this library online for benchmarking their own definitions and specifications for KRIs across their institutions. Once participants have had time to standardize KRI measurement sufficiently, Part III can begin the benchmarking of values for selected KRIs.”
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About RMA
RMA is a member-driven professional association whose sole purpose is to advance the use of sound risk principles in the financial services industry.
Founded in 1914, RMA promotes an enterprise-wide approach to risk management that focuses on credit risk, market risk, and operational risk. Headquartered in Philadelphia, Pennsylvania, RMA has about 3,000 institutional members that include banks of all sizes as well as nonbank institutions. They are represented in the Association by 16,000 commercial loan, credit, and risk management professionals in the 50 states, Puerto Rico, Canada, and numerous foreign cities, including Hong Kong, Singapore, Melbourne, and London. More information about RMA can be found at www.rmahq.org.
About RiskBusiness International Limited
RiskBusiness International Limited is a risk consultancy specialising in leading operational risk management practices. It is an association of like-minded industry professionals, who have the aim of furthering the risk management discipline to enable better risk-reward decision making.
RiskBusiness was founded in 2003 by Jonathan Davies and Mike Finlay. It acquired the operational risk consultancy practice of Raging Torrents International Limited in June 2003. The registered head office is in England, with principal consultancy locations in London, New York and Zurich. RiskBusiness consists of only seasoned industry players who have proven experience in designing, delivering, implementing and maintaining leading risk practices. More information about RiskBusiness can be found at www.riskbusiness.com.