Risk STILL isn’t optional: nor is the truth!


Where are the “risk leaders”?

Instead of FS compounding the problems we should be utilising our expertise and resources to establish a means of “repaying” society, by promoting, supporting and investing in building community resilience.

EVERY project, process, task, operation being undertaken by an organisation is reliant upon varying degrees of INTER-CONNECTED process that (often unseen) underpins function. Each contains some degree of risk.

The more complex the process or product the greater the exposure. Risk does not ‘run parallel’ to function, it is inherent to it and, as such, RM cannot be viewed as an option or add-on! To me this, scarily common and naive perspective serves to reinforce the need for a paradigm shift in Corporate culture.

I have revisited this old article for a couple of reasons. Firstly, (even though I say so myself) I thought it rather good! Secondly, I am seriously concerned that, where there should be “thought leadership”, there are, instead, clear signs that in some quarters a, subjective, consultancy-led approach is preferred to a rigorous, quantitative, analysis of business exposures!

This despite IRM, in a paper issued last year [Risk Appetite & Tolerance], advocating a more quantitative approach. In their accompanying webinar they offered a timeous reminder of Board level responsibilities:

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At what point does a “high-risk” strategy become a matter of Corporate Governance?:: FSA on HBoS “very serious misconduct”


…perhaps a more pertinent question is: “how many sets of rules are there?”

The FSA has censured Bank of Scotland after finding it guilty of “very serious misconduct” which led to it being bailed out by the Government and taken over by Lloyds Banking Group.

The regulator says a fine in this case would be “both merited and substantial” but has decided against imposing a financial penalty as it says the taxpayer has already bailed out the bank once through the Lloyds takeover of Halifax Bank of Scotland in January 2009. Read more of this post

Halifax to pay £500m to mortgage customers


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How much more needs said about Financial Services and lack of trust?

In short “goodwill” is a sick joke and payments being “agreed after a deal with FSA”  smack of the NEED to avoid transparency…am I wrong or was it not the RESPONSIBILITY of FSA to protect the public from just these kind of FS mistakes and similar banking errors.

Would it be too unkind to speculate that this may be to do with the fact that payments should be even greater than the mere £500,000,000 quoted here?

That is another whopper of a mistake.

How many jobs will this account for?

DO we know what the true cost to customers was?

Who “owns” this bank anyway?

 

The Halifax is to make “goodwill” payments to 300,000 mortgage customers that will total up to £500m.

The bank, now part of Lloyds Banking Group, admitted confusing customers about its right to charge them more for their standard variable rate mortgages.

The Halifax raised the margin on some of these mortgages from 2% to 3% above base rate in January 2009.

The payments to the customers have been agreed after a deal with the Financial Services Authority (FSA).

“The group is committed to running its business with the highest levels of integrity and treating its customers fairly, and therefore believes that a proactive co-ordinated programme to identify affected customers and make goodwill payments is the appropriate course of action,” Lloyds said.

via BBC News – Halifax to pay £500m to mortgage customers.

‘Power curves’: What natural and economic disasters have in common


The following extract is taken from a thought-provoking article from McKinsey. Power curves are much loved by authors, such as Clay Shirky, Seth Godin, Charles Leadbetter to illustrate the potential for conversation, collaboration and innovation, through adoption of: web 2.0; social media; crowdsourcing; collective intelligence, etc.
They are, therefore, very much “in vogue” and, I suspect, will continue to be so for some time to come…probably not a great surprise that economic theory is enjoying a renaissance in difficult times!
However, from the perspective of “financial regulation” in UK, it is difficult to believe that, if FSA chose to IGNORE the warning signs [generated by financial modelling] about Northern Rock and HBOS, they would be any more effective by monitoring “the system”!!!
“Make the system the unit of analysis. You can’t assess the behaviour and performance of a specific agent—for example, a financial-services company—without gauging the behaviour and performance of the system in which it is embedded. Proponents of a systemic financial regulator that would span multiple subsectors and geographies are making a similar argument”.
Click on the link and feel free to give me your thoughts: Power Curves…