Risk Essay

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------------------------------------------------- Risk Control Or why is risk management important for an organisation ------------------------------------------------- Risk Control Or why is risk management important for an organisation Abstract The financial crisis in 2008 was an unfortunate event, causing the global financial markets to rethink its regulatory system. Filled with gaps, inefficiencies and lack of control the frameworks that were in place proved to be in the roots of crisis - the big investment banks believed they were ‘too big to fail’. However, after the collapse of Lehman Brothers this is no longer the case and that is why regulatory frameworks has become more and more stringent - new capital requirements, compliance procedures and people management are just a few to mention. The main purpose of those regulations is properly identify the risks, which were previously missed and to potentially create internal controls to manage and mitigate then in order to prevent similar events from 2008 from happening again. Therefore it is vital to recognize one of the most important aspects of an organisation – Risk Management. The dedicated team is responsible for the proper monitoring and mitigating all risks arising from the different activities of the bank. That is why investment banks begin to steadily develop their risk management functions, the inefficiency of which in 2008 was crucial. But given the complex organizational structures and medium to low levels of transparency, proper risk management has become one of the biggest obstacle to big multinational corporations. Recognizing this issue, many banks are currently undergoing restructuring programmes in order to better accommodate the changes in the tightening regulatory environment. In this paper I will closely examine the consequences from the already executed reforms as well as

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