Banks Need More Data to Achieve Risk Management Goals – S&P

Despite the revolution in bank risk management, banks’ ability to effectively manage risk continues to be hampered by the ongoing need for more data, according to the Standard & Poor’s Risk Management Benchmarking 2001 report. Standard & Poor’s Risk Management Benchmarking 2001 report – developed by a consortium of more than 50 banks globally – looked at five key aspects of risk management: risk governance and strategy, market risk, credit risk, operational risk, and capital management. Among the most important findings in the report were: Few banks have more than five years of reliable internal data on probability of default; Banks are using internally developed models to extend their risk management capability, but most lack the appropriate historical data to develop and support theses models; and only half of the banks in the study say they include risk management in their strategic planning process.


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