FRSGlobal

There are several roles in financial organisations that may hold this title:

- the Asset and Liability Management (ALM) manager(s)

- the Treasurer

- the Chief Risk Officer

Job description

The ALM managers typically control the Market and Liquidity-related risks within a bank, excluding the trading book which is controlled by the Treasurer. The Treasurer also often sees themselves as responsible for Market and Liquidity risk.

The Chief Risk Officer (CRO) is viewed as the person who oversees the combination of Market, Credit and Operational risk.

The CRO's Point of View

The financial crisis uncovered catastrophic errors in the risk models that banks have historically produced. At the heart of the credit crunch was a fundamental failure in the old risk models and, as a result, the trust that stakeholders placed in the old way of evaluating risk - and in the CRO - has diminished.

CROs are left on the back foot, having to re-evaluate their approach. They face the challenge of having to put in place new risk models, quickly, to not only rebuild trust internally and externally, but also to prove best practice and demonstrate the value of robust risk modelling.

As the number and scope of regulations increases, such as with the focus on liquidity risk spearheaded by the FSA in the UK, the way CROs previously did business must change. The new risk models need to be more far-reaching and encompass greater stress testing, meaning that CROs need to extend their risk capabilities quickly to meet today's challenges.

And with tight deadlines to conquer, CROs need a quick fix to enable them to complete this both rapidly and effectively.