The Rubik's cube of risk

The financial crisis has emphasised the need for integrated risk management and closer collaboration between trading desks and the middle office, covering market risk, collateral management, limits and counterparty risk exposure calculation. How well are banks rising to this challenge and what are technology vendors doing to help? By Clive Davidson

The financial crisis has thrown into sharp relief the gap between the ideals of risk management and actual practice. While virtually all market participants agreed an integrated approach to risk was a good idea in theory, the fact many individual business lines were reporting record profits until the crisis hit meant there was little drive to bring them under a co-ordinated risk management umbrella.

This fragmented, silo-by-silo approach to risk hindered banks in their efforts to navigate the