Enterprise risk management: Towards a comprehensive yet practical enterprise risk function
Abstract
As enterprise risk management (ERM) is a relatively new discipline within financial institutions, the aim is to provide in the present paper practical guidance and insights into what would constitute an effective enterprise risk function. One of the key challenges banks are facing remains the creation of a comprehensive risk assessment addressing all risk categories, rather than a siloed compilation of risk measures. Enhancing analytics to better understand the risk profile, developing standards and policies applied firm-wide and measuring risks in the context of the firm’s risk appetite are areas where ERM can and should add value. This paper is hoping to help answer how this can be achieved through the following topics: governance principles, reporting and escalation (including risk taxonomy and scoring), risk appetite and stress testing. Risk architecture and technology breakthroughs in the context of enterprise risk management will also be reviewed. Finally, the benefits of implementing an enterprise risk approach firm-wide will be presented from a bank’s perspective, including the business line and internal audit standpoint.
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Author's Biography
Fabrice Fiol is a Managing Director and Deputy Head of Enterprise Risk Management for the Société Générale Americas (SG) division. In this capacity, he co-manages a team responsible for risk appetite statement and reporting and risk identification, and he is also the head of SGUS Enterprise Stress Testing. He was previously in charge of the market risk cross-asset teams overseeing regional limit framework, Market Risk Stress Testing and various regulatory market risk initiatives, including the Volcker rule. He also headed the equity/fixed income/commodity market risk teams for SG in the Americas, including derivative activities in New York, Brazil and Canada. Fabrice joined SG NY in 2009. Prior to SG, he was a Senior Vice President at Natixis–NY in charge of Trading Risk Management on a US agency mortgage-backed security (MBS) portfolio. Prior to Natixis, Fabrice was a Vice President at the reinsurance company Swiss Re–NY, where he was initially in charge of front office quantitative pricing and subsequently joined the US Rates Derivative Desk trading. Fabrice graduated from the National School of Statistics and Economics (ENSAE) and holds a graduate degree (DEA) from Paris VII University.
Citation
Fiol, Fabrice (2019, September 1). Enterprise risk management: Towards a comprehensive yet practical enterprise risk function. In the Journal of Risk Management in Financial Institutions, Volume 12, Issue 4. https://doi.org/10.69554/MDSI1547.
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