Strengthening value and risk culture using a real-time logical tool

Abstract

While many lessons were learned from the 2007 global financial crisis, the Basel Committee on Banking Supervision identifies as one of the most significant the fact that the IT and data architectures used by banks were inadequate to support comprehensive management of financial risk. Many banks lacked the ability to aggregate risk exposures and identify concentrations quickly and accurately at the bank group level, across business lines or between legal entities. Some banks were unable to manage risk properly because of weak risk data aggregation capabilities and risk reporting practices. These weaknesses had severe consequences for banks and for the stability of the financial system as a whole.