Enterprise Risk Management

Enterprise risk management (ERM) is an organization’s enterprise risk competence—the ability to understand, control, and articulate the nature and level of risks taken in pursuit of business strategies—coupled with accountability for risks taken and activities engaged in, which contributes to increased confidence shown by stakeholders.

The basic concept of enterprise risk management has been applied, more or less, in several industries for well over a decade. The changing regulatory environment, economic turmoil, and growing complexity of products, tools, and risks has, among other influences, helped to launch the practice of enterprise risk management into the financial services area. In this respect ERM—in the banking world—is very much in its early development, though much progress has been made.

By definition, the business of banking exposes the organization to a wide variety of risks. The ERM framework is designed to support the depth and breadth of activities by providing a structured approach for identifying, measuring, controlling, and reporting on the significant risks faced by an organization. Specific risk management (e.g. credit, operational, market), capital management, and liquidity management provide the essential underpinnings to an ERM framework.

In general, RMA provides practical ERM guidance to members by offering an array of products and services tailored to the size and complexity of our member institutions:

What is ERM?

• Enterprise Risk Management (PDF)
• Enterprise Risk Management Framework, 2012 Brochure (PDF)
• Video 
  • What is ERM? Yousef A. Valine, EVP & CRO, First Horizon National Corporation
• Podcasts 
  • Strong Risk Management, Kathleen A. Flannery, SVP & CRO, PNC
  • ERM & Governance, Edward P. Schreiber, Managing Director, Alvarez & Marsal
  • Scenario Analysis and Stress Testing, Bill Nayda, Ph.D., Second Pillar Consulting

Announcements

• RMA response regarding FASB File Reference No 2012-230, Private Company Decision-Making Framework (PDF), October 31, 2012

Benchmarking Services & Studies

• Community Bank Risk Management Staffing Study, March 2013
• Key Findings from RMA's CRO 'Span of Control' Survey (PDF), RMA Journal, November 2012
• RMA AFS Risk Analysis Service
  • New Enhancements (PDF)
  • RMA/McKinsey Enterprise Risk Management: Global Banking Survey 2012 
    • For more information, please send your interest to Stacy Germano
• The Critical Nature of Data Quality (PDF), key findings from RMA AFS Data Quality Survey, RMA Journal, November 2012

Council

• Enterprise Risk Management Council

Events

• ERM Briefings
• ERM Forum
• Legal and Risk Management Round Table
  • June 25–26, 2013, Chicago, IL
  • For more information, please contact Mark Zmiewski
• Stress Testing Boot Camp:  A Hands-On Approach to Performing Effective Stress Tests

Executive Education 

• The RMA/Wharton Advanced Risk Management Program 
• The Risk Management School

Regulatory (in partnership with RMA’s Regulatory Relations practice)

• RMA Capital Working Group
• Regulatory Guidance
  • Dodd-Frank Act
    • FDIC Initiatives under the Dodd-Frank Wall Street Reform and Consumer Protection Act
    • Implementing the Dodd-Frank Act: The Federal Reserve Board's Role
    • Enhanced Prudential Standards and Early Remediation Requirements for Covered Companies, Regulation YY (PDF)
    • Response of The Risk Management Association (PDF)
  • Capital Planning
  • Guidance for Evaluating Capital Planning and Adequacy
  • Credit Risk
    • Federal Reserve Bank:  Supervisory Letter, SR 10-10 Interagency Guidance on Correspondent Concentration Risk
  • Market Risk
    • Interagency Supervisory Guidance on Counterparty Credit Risk Management
  • Model Risk
    • Supervisory Guidance on Model Risk Management
  • OCC's Heightened Expectations for Large Banks (Members Only) NEW!
  • Stress Testing
    • OCC – Community Bank Stress Testing:  Supervisory Guidance, October 18, 2012
    • OCC Final Rule Regarding Annual Stress Tests, October 9, 2012
    • Supervisory Guidance on Stress Testing for Banking Organizations with More Than $10 Billion in Total Consolidated Assets (PDF), May 2012
    • Principles for Sound Stress Testing Practices and Supervision – Basel Committee on Banking Supervision
  • Risk-Focused Approach to Consolidated Supervision – Board of Governors of the Federal Reserve System Consolidated Supervision of Bank Holding Companies and the Combined U.S. Operations of Foreign Banking Organizations, SR 08-9/ CA 08-12
  • Interagency Guidance on Sound Incentive Compensation Policies
  • The Supervisory Capital Assessment Program:  Design and Implementation

RMA Speaks Out

• Bank Boards Provide Key Checks in ERM Process (PDF), courtesy of Bank Safety & Soundness Advisor 

Training

• Enterprise Risk Management for Community Banks
• Credit Portfolio Management Workshop

Workbooks

• Board Governance and Reporting Workbook – COMING SOON!
• Risk Appetite Workbook
• Scenario Analysis and Stress Testing Workbook for Community Banks

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Comments or questions relating to enterprise risk management within RMA may be addressed to Mark Zmiewski, Director, Enterprise Risk & Product Management or Stacy Germano, Associate Director, Enterprise Risk & Product Management.