According to the 9th Banana Skins Banking Risk Survey carried out by the Centre for the Study of Financial Innovation (CSFI) and PricewaterhouseCoopers (PwC), the turmoil on financial markets has brought a dramatic change in risk structure. The risks that seem to be on the rise according to Russian respondents reflect the current global concern about the global market situation and economic implications.
The survey received responses from 25 Russian bankers. The respondents identified 30 key risks and ranked them according to priority.
Basically, Russian banks share worldwide concerns about market risks but there are several marked differences. Russian respondents are most concerned about market risks such as equities, interest rates and currencies and are much less worried about risk management quality or overregulation. According to Russian respondents, on the rise are risks connected with poor back-office operation, money laundering and increased competition due to new market entrants.
A BBC Interview with Alan Vaksman, Director, Advisory Performance Improvement (in Russian)
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Banking Banana Skins 2008
(2006 ranking in brackets)
| |
World |
|
Russia |
| 1 |
Liquidity (-) |
1 |
Liquidity (-) |
| 2 |
Credit risk (2) |
2 |
Equities (4) |
| 3 |
Credit spreads (-) |
3 |
Interest rates (8) |
| 4 |
Derivatives (3) |
4 |
Credit risk (1) |
| 5 |
Macroeconomic trends (14) |
5 |
Macroeconomic trends (13) |
| 6 |
Risk management techniques (10) |
6 |
Currencies (12) |
| 7 |
Equities (12) |
7 |
Credit spreads (-) |
| 8 |
Too much regulation (1) |
8 |
Back office (-) |
| 9 |
Interest rates (5) |
9 |
Fraud (21) |
| 10 |
Hedge funds (7) |
10 |
Risk management techniques (7) |
| 11 |
Fraud (11) |
11 |
Derivatives (28) |
| 12 |
Commodities (4) |
12 |
Money laundering (6) |
| 13 |
Currencies (13) |
13 |
Retail sales practices (2) |
| 14 |
Rogue trader (27) |
14 |
High dependence on technology (15) |
| 15 |
High dependence on technology (6) |
15 |
Competition from new entrants (9) |
| 16 |
Corporate governance (8) |
16 |
Too much regulation (5) |
| 17 |
Management incentives (26) |
17 |
Rogue trader (18) |
| 18 |
Emerging markets (9) |
18 |
Conflicts of interest (14) |
| 19 |
Back office (24) |
19 |
Commodities (24) |
| 20 |
Retail sales practices (22) |
20 |
Corporate governance (10) |
| 21 |
Conflicts of interest (16) |
21 |
Political shocks (19) |
| 22 |
Political shocks (15) |
22 |
Emerging markets (23) |
| 23 |
Business continuation (21) |
23 |
Hedge funds (27) |
| 24 |
Money laundering (18) |
24 |
Merger mania (17) |
| 25 |
Environmental risk (25) |
25 |
Payment systems (22) |
| 26 |
Banking market over-capacity (17) |
26 |
Environmental risk (26) |
| 27 |
Payments systems (29) |
27 |
Too little regulation (25) |
| 28 |
Merger mania (19) |
28 |
Banking market over-capacity (3) |
| 29 |
Too little regulation (30) |
29 |
Management incentives (29) |
| 30 |
Competition from new entrants (28) |
30 |
Business continuation (20) |
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