If there was one lesson to be learnt from the 2008 financial crisis, it was that prudent risk management made all the difference to the survival of companies.
It seems companies across the globe will require a few more jolts to learn the lesson.
In a survey of 111 financial institutions worldwide with at least $19 trillion (Rs916 trillion) in assets, accounting and consultancy firm Deloitte found that more than half of them did not have fully integrated risk management practices, PTI has reported.
Most trading and financial services companies engage in a bewildering variety of tasks every day. As a result, comprehensive risk management of the kind that economists envision is a near impossibility. Harried managers look for seductive one-size-fits-all numbers such as value at risk.
The year 2008 showed such concepts don’t work. What the Deloitte survey shows is that many of them could not care less. A complex world requires a solution that lies somewhere between doing nothing and running after the mirage of easy, but meaningless concepts.