July 19, 2004 News Archive

Governor Bies on Enterprise-wide Risk Management
In her speech, "Using Enterprise-wide Risk Management to Effectively Execute Business Strategies," Federal Reserve Governor Susan Schmidt Bies addressed attendees at the Risk Management Association and Consumer Bankers Retail Risk Conference. She challenged them "... to think about how you can work together to improve the execution of your banks' strategic plans. Consumer banking managers should realize that they can look to an effective enterprise-wide risk-management process as a way to better understand the risk exposure in their products and customer groups. It can help identify the important mitigating controls that should be in place to keep risk exposures at the level necessary to achieve profitability targets. And by working with managers who spend their time thinking about different types of risks, consumer bankers can reduce unintended customer service errors, compliance breakdowns, and difficult product rollouts.

For the risk managers at this conference, I hope the message you have heard is that you should be actively engaged with managers throughout the organization, talking about the merits of a consistent, sound enterprise-wide risk management culture. Demonstrate to managers that the risk-management process will help them better understand the inherent risks of their activities so they can more effectively mitigate them and achieve their profit goals."