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Risk Assessment and What it Covers
Answered by BOL Guru Kathleen Blanchard
Bios
Question: What is a risk assessment and what types of things would it cover?
Answer: A risk assessment is really a formalization of thought processes that go on
regularly, but it provides an opportunity to document the process, make sure you
have thought of everything that could go wrong and how the bank addresses
those risks, and have a finished product to include with management and board
approval requests and information packages for regulators.
Regulators like to see risk assessments as new products, systems or business
lines are introduced so that they can see that you have thought things through
and properly addressed any risks. Take a look through your regulator's exam
procedures and see how many times "risk based" is mentioned. Start out small
with a new product process, then bring in your existing products/business lines
as they come up for their annual assessment/budget.
Archive of Risk Management Questions
First published on BankersOnline.com 11/05/08
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