The report contains a section on bank management and governance and this begins as follows:
In [the] setting of macroeconomic ease and growing financial integration, bank managements in Ireland faced major new opportunities. However, this environment also entailed challenges for bank governance – governance notably in areas such as internal priority setting; risk assessment systems; the enforcement of due processes for loan evaluation; disclosure standards; and checks and balances on the day-to-day operations of management. These challenges were not met. Errors of judgement in bank management and governance contributed centrally to Ireland’s financial crisis. It seems that there were key weaknesses in some banks’ internal risk management in areas such as stress-testing; the assessment of credit risks; and in some cases major lapses in the documentation of loans – and that these were factors that allowed vulnerabilities to develop".
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