Cebs releases consultation on risk management guidelines

New risk management principles from Cebs are to form a comprehensive guidebook

LONDON - The Committee of European Banking Supervisors (Cebs) has released a public consultation on high-level principles for risk management at banks.

Kerstin af Jochnick, chair of Cebs, said: "I am confident that the set of overarching high-level principles that we are now developing will help banks in upgrading risk management practices within the financial system."

Cebs says its consultation seeks to enhance and consolidate previously separate presentations and guidelines on risk management into a comprehensive guidebook. This includes high-level principles for supervised firms and supervisors, designed for Pillar 2 implementation of the Capital Requirements Directive.

Areas of focus include governance and risk culture, risk appetite and risk tolerance, the role of chief risk officer and the risk management function, risk models and integration of risk management areas, and new product approval policies and processes.

Cebs conducted an analysis of existing risk management guidelines in response to a call for strengthened practice from the G-20 Declaration and Action Plan published in November 2008. The objective of this Cebs analysis was identifying gaps in risk management coverage and other areas where updates to existing guidelines would bring improvement.

The consultation period runs until July 10, 2009. The consultation paper can be read here.