Autonomy or centralisation?

Regulators have drawn attention to the silo approach taken by many financial institutions, which hampered effective risk management across organisations. Mauro Maccarinelli and Michael Zerbs argue the time has come for firms to take a more centralised approach and foster greater integration in order to empower the risk management function.[QQ]

Managing risk requires great discipline during times of economic stability, but it increases in complexity with the dislocation of markets. In light of recent market turmoil, the question of how to best understand, manage and mitigate risk has become a topic of great discussion. The issue has even attracted mainstream attention, where the most common suggestions for enhancing risk management call for additional oversight, transparency and accountability.

Among risk practitioners, a common