Financial services firms still have plenty of work to do to address weaknesses in their risk management practices, according to a report from a group of regulators.

The so-called Senior Supervisors Group — composed of financial supervisors from Canada, France, Germany, Japan, Switzerland, the UK and the United States — issued a report that evaluates how weaknesses in risk management and internal controls contributed to industry distress during the financial crisis.

The report concludes that despite firms’ recent progress on improving risk management practices, “underlying weaknesses in governance, incentive structures, information technology infrastructure and internal controls require substantial work to address.”

The report’s conclusions are based on both a series of interviews with firms about funding and liquidity challenges, and a self-assessment exercise in which firms were asked to benchmark their risk management practices against a series of recommendations and observations taken from industry and supervisory studies published in 2008.

Credit crisis caused by clashing risk management systems: C.D. Howe Institute
July 22, 2008

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=45425&cat=147&IdSection=147&PageMem=&nbNews=

Senior Supervisors Group releases report on disclosure practices
April 11, 2008

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=44131&cat=8&IdSection=8&PageMem=&nbNews=