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    • Regulator official addresses profiling at U.S. risk summit
        (Copyright Thompson’s World Insurance News
        Not to be redistributed by individual recipients.)
        It is not enough to give tacit approval to management in setting a risk profile as financial services become more and more complex and inter-connected, a Canadian federal regulator official said at a meeting last week in Massachusetts.
        Ted Price, the Office of the Superintendent of Financial Institutions’ assistant superintendent, supervision sector, said in prepared remarks for the Riskminds USA 2010 Risk Regulation Summit in Cambridge that the world will likely see more frequent shocks to the financial system.
        Therefore, he said, boards need to engage management, ask questions, demand answers, and not sign off until they are satisfied. And to be able to do that, directors need to be risk-literate.
        Now is a good time for boards and regulators to reassess the skill sets required of directors.
        “Do they need more directors with financial institution expertise,” Mr. Price asked.
        “Do they need to provide better training or education to their directors? How does risk governance link into their strategic planning?” He said that defining financial risk appetite is as important in an institution’s strategic planning as other production inputs, like budgets. “In the past, some boards have felt that it was not appropriate for directors to engage management regarding risk. “That it would require too much education and discussion.
        “This implies that risk management is too complex for the board and that it cannot be explained simply or understood.
        More in our May 17, 2010 edition
        
    		 


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