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3/20/14 - Spotlight Turns to Risk Culture

Revelations of control breakdowns within the financial services industry continue to pile up despite the ongoing, post-crisis efforts of financial institutions to improve governance structures, tighten controls, and strengthen risk and compliance functions. Supervisors seem increasingly convinced that a deficient risk culture is the common thread that ties together the breakdowns that have occurred in a number of areas.

Supervisors globally are taking a stronger hand in establishing quantitative measures designed to make risk culture less of an art and more of a science. Their focus on culture has practical ramifications for how institutions manage risk and build control frameworks. Please click below to read a Sightlines InFocus by Susan Krause Bell and Wayne Rushton that identifies the key indicators of risk culture, and provides 10 questions that help firms assess their own.