14/06/2010 Author: Shannon Hawthorne

Regulation replaces reputation as CROs' biggest concern

Regulation has overtaken reputation as the biggest risk concern for asset management chief risk officers (CROs), according to Ernst & Young’s second annual industry risk management study.

The research, which surveyed 29 heads of risks and CROs, further identified the desire to optimise capital and liquidity as the third most pressing concern.

The asset management industry is in a very different place to this time last year,” said Roy Stockell, leader of Ernst & Young’s Europe, Middle East, India and Africa asset management business.

He continued: “It has wrestled with a number of new regulations in the past 12 months, from the Walker Review to Ucits IV through to the controversial Alternative Investment Fund Manager (AIFM) Directive and Internal Capital Adequacy Assessment Processes (ICAAPS).”

The report also highlighted the changing role of the CRO, with a growing number now reporting to chief executive officers.

“The role and remit of the risk function has elevated from a ‘risk monitoring’ function reactive to events, towards more of a strategic enabler of the business,” said Dr Anthony Kirby, director in the Ernst & Young regulatory and risk management practice.