RIMS released today an executive report that explains how ERM could have helped to prevent last year's financial crisis. The report, titled "The 2008 Financial Crisis: A Wake-up Call for Enterprise Risk Management," also provides insight on how ERM can help to prevent future financial catastrophes.
In the report, RIMS contends that there were a number of behavioral breakdowns that contributed to the financial crisis. These failures include the over-use of financial models, the over-reliance on compliance and controls, the failure to understand risk tolerance and the failure to embed risk management within the organizations. Additionally, there was no governance failsafe built into risk management frameworks.
To read "The 2008 Financial Crisis: A Wake-up Call for Enterprise Risk Management", visit www.RIMS.org/ERMwhitepaper.