MIp11-12_1109.qxd 21/10/09 16:31 Page 3
Risk management | 11
Protect
yourself
Many four letter words have been
uttered in the industry recently, but ‘risk’
is arguably the most relevant. Joanne
Smith, chief executive & creative officer
at The Consulting Consortium, explains
L
ender and provider attitudes to will need to hold will be refined over time to
risk have obviously had to ensure that the combined impact of higher
change over the past couple of capital and liquidity standards is proportion-
years. Without dredging up old ate. The qualitative aspects of the regime will
ground regarding funding and be put into place by December 2009.
credit issues it is fair to say that S
risk management has risen to circle6
ome of the new rules include:
What it describes as 'granular' and more fre-
the top of the government, Financial Services
Authority (FSA) and indeed consumer focus circle6
quent reporting requirements
An updated quantitative regime coupled
when it comes to financial services.
Indeed, the FSA recently published its final circle6
with a narrow definition of liquid assets
A new regime for foreign branches that
rules on the liquidity requirements expected of
firms. The regulator says the overhaul is circle6
operate in the UK
Over-arching principles of self-sufficiency
designed to enhance firms’ liquidity risk man-
agement practices and is based on the lessons circle6
and adequacy of liquid resources
Enhanced systems and controls require-
learned since the start of the credit crisis in ments
2007. It adds that it will not tighten quantita- It is important that intermediary firms are
tive standards before economic recovery is well versed in all aspects of risk management,
assured and plans to phase in the quantitative or at least use a compliance specialist that is.
aspects of the regime in several stages, over an Going back to the basics risk can be defined as
adjustment period of several years. The watch- “The process of analysing our exposure to risk
dog also says this is to take into account the and determining how to best handle such
fact that all firms at present are experiencing a exposure”.
market-wide stress. As such, risk management is a central part
of any organisation’s strategic management. It
Liquidity rules is the process whereby organisations identify
The precise amount of liquidity that each firm and address the risks attaching to their activi-
www.mortgageintroducer.com Nvember 2009 Mortgage Introducer
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44