Rethinking risk management in financial services: practices from other domains
This report responds to the need to improve risk management strategies at both the system-wide and institutional levels in the financial services industry. It tries to learn from practices and patterns in domains such as aviation, fisheries, wildfire fighting, immunology/epidemiology, telecommunication and pharmaceuticals to provide fresh perspective and thinking and/or transfer them to finance. It asserts that these practices not only address operational concerns such as infrastructure failure or natural disasters but also strategic issues such as capital, buy/sell activities, and shifts in management/ownership – possibly involving multiple institutions and across jurisdictions. It intends to highlight potential vulnerabilities, and increase preparedness for systemic events, looking forward to internalize the lessons learnt and make the necessary improvements to make the global financial system more resilient and better able to handle the next meltdown, when it happens.