April 27, 2012
Several themes emerged from GCOR VI, The Risk Management Association’s sixth annual Governance, Compliance and Operational Risk Conference, held April 25-26 in Cambridge, Mass.
Top concerns included the need to present operational risk insights and tools to business lines in ways that are understandable, relevant and helpful to them in identifying and managing risks. Reputational risk came up frequently, reflecting a tumultuous post-crisis environment and heightened regulatory scrutiny. Incentive compensation tied to risk-adjusted performance measures was identified as a pressing need. Several sessions addressed risk and control self-assessments, scenario analysis and other tools and metrics. Establishing a risk appetite framework at an enterprise-wide level was a common theme.
In a panel discussion, regulators from the Federal Reserve Banks of New York and Richmond and the OCC pointed out positive news in the industry. Many banks have established risk appetite frameworks and completed infrastructure projects that address MIS deficiencies, they said. Dodd-Frank implementation will continue to generate industry uncertainty for the next several years, they acknowledged.
Four chief operational risk officers, in their panel discussion, said they felt their banks’ operational risk measures have reached an advanced stage, although the discipline as a whole is still young. Reducing operational risk losses and engaging business line managers in identifying and managing risks are ongoing priorities, they said.
Speakers included Yousef A. Valine, executive vice president and chief risk officer, First Horizon, and Daniel J. Roussell, senior vice president and head of operational risk, State Street, and RMA Operational Risk Council chair. Also speaking were Jeff Ingber, author of Resurrecting the Street: How U.S. Markets Prevailed After 9/11, and Beth Rudofker, managing director, Corporate Operational Risk, JPMorgan Chase.
GCOR VI attracted more than 170 operational risk leaders and regulators. Sponsors and exhibitors were Wolters Kluwer Financial Services (gold sponsor), Algorithmics, AFS, KPMG, Metric Stream, Protiviti, OpenPages, BWise, and Centerprise.
Founded in 1914, The Risk Management Association is a not-for-profit, member-driven professional association whose sole purpose is to advance the use of sound risk principles in the financial services industry. RMA promotes an enterprise approach to risk management that focuses on credit risk, market risk, and operational risk. Headquartered in Philadelphia, Pennsylvania, RMA has 2,500 institutional members that include banks of all sizes as well as nonbank financial institutions. They are represented in the association by more than 18,000 risk management professionals who are chapter members in financial centers throughout North America, Europe, and Asia/Pacific.
Stephen Krasowski, firstname.lastname@example.org, 215-446-4095
Frank Devlin, email@example.com, 215-446-4137