No Time for Complacency

In a speech last week to the Banque Centrale du Luxembourg, Vice Chairman of the Federal Reserve Donald Kohn provided a thorough analysis of events leading to the current financial crisis.  A major portion of his remarks focused on the inadequate investment in risk management by many financial institutions.  In his view, the long period of relative stability in financial markets bred a high level of complacency and inattention to the growing risks.  As he stated,

“Complacency contributed to the unwillingness of many financial market participants to enhance their risk-management systems sufficiently to take full account of the new (perhaps unknown) risks they were taking on.”

Risk management should be a primary focus of all companies, financial and non-financial, at all times.  It is precisely the moment when profits are at their peak and economic times are good that companies should be most vigilent.  Now, we are in catch-up mode and must make greater investment in risk management to ensure complacency does not become part of the risk equation again.

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About Wheelhouse Advisors
Wheelhouse Advisors LLC is the publisher of The ERM Current™, an online publication and blog dedicated to providing the latest updates on current trends in Enterprise Risk Management & Control. Wheelhouse Advisors provides cost-effective Enterprise Risk Management & Control solutions to both large and mid-size corporations. To learn more about Wheelhouse Advisors, please visit our web site at www.WheelhouseAdvisors.com.

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