Under the scrutiny of layers of regulatory bodies, financial institutions continue to implement Enterprise Risk Management (ERM). Since the Federal Reserve (Fed) first placed emphasis on ERM in the mid-1990s, banks have steadily taken a top-down holistic approach to risk management.
Risk categories include areas such as credit, market, liquidity, operational, legal, and reputational, which can all be impacted by a good risk management structure. The Fed examines ERM as part of its institution supervision responsibilities; however, as a regulator of holding companies, the Fed is mainly concerned with banks’ abilities to tie regulatory capital to economic capital.
In this module, students are exposed to enterprise risk management with a specific industry – financial services – which is highly regulated and depends heavily on effective risk management.
Module learning objectives:
- Understand ERM for financial institutions
- Understand the role of regulation in ensuring effective risk management
- Develop an appreciation for the challenges regulators
This module includes material for up to four 75-minute class periods. The material is flexible and can be adapted to meet your needs.