Professionalizing Risk Management

Excerpt from Institutional Investor

By David X Martin

Financial institutions have made improvements in risk management since the past crisis, but to help avert another, similar disaster, risk managers should be trained, licensed and regulated just like accountants, lawyers and actuaries.

Reports of risk management failure are now as common as news of extreme weather, and no one is getting any better at forecasting either of them. As a result, the next London Whale disaster, Knight Capital Group trading fiasco or MF Global Holdings obituary should not be very surprising. Still, much progress has been made by financial institutions, asset managers and mutual funds — and by their boards, management and, most important, risk managers. We now have the opportunity to do something that will truly change the game: professionalize risk management.

Read the full story on Institutional Investor