The Senior Supervisors Group (SSG) comprises of national regulators from:
- Canada (Office of the Superintendent of Financial Institutions).
- France (Banking Commission).
- Germany (Federal Financial Supervisory Authority).
- Japan (Financial Services Agency).
- Switzerland (Financial Market Supervisory Authority).
- UK (FSA).
- United States (Board of Governors of the Federal Reserve System, Federal Reserve Bank of New York, Office of the Comptroller of the Currency and Securities and Exchange Commission).
The SSG has now published a report entitled Risk Management Lessons from the Global Banking Crisis of 2008. In this report the SSG reviews in depth the funding and liquidity issues central to the financial crisis and explores critical areas of risk management practice warranting improvement across the financial services industry. The report is a successor to the first SSG report entitled Observations on Risk Management Practices during the Recent Market Turbulence, published in March 2008.
The SSG reports that in relation to liquidity risk management some improvements have been made since its last report although further improvements are necessary and that this must remain a key priority for financial services firms.
The SSG also describes a number of areas of weakness that require further work by firms and this includes:
- The failure of some boards of directors and senior managers to establish, measure and adhere to a level of risk acceptable to the firm.
- Compensation programs that conflicted with the control objectives of the firm.
- Inadequate and often fragmented technological infrastructures that hindered effective risk identification and measurement.
- Institutional arrangements that conferred status and influence on risk takers at the expense of independent risk managers and control personnel.
In November 2008, the SSG asked twenty firms to conduct self-assessments by benchmarking their current risk management practices against the recommendations and observations that appeared in the March 2008 SSG report. The SSG created a template for firms to use in the self-assessment exercise. The SSG has now published this template as a supplement to its new report and it is a compilation of the recommendations and observations from the 2008 studies, organised by theme and clustered by sub-theme.
View Senior Supervisors Group: Risk Management Lessons from the Global Banking Crisis of 2008, 21 October 2009