What have been the benefits of the new model-based approach to risk measurement and management? The most important is that better risk measurement and management contribute to more-efficient resource allocation.
The message and corresponding conduct should empower line staff to elevate ethical or reputational concerns to appropriate levels of management without fear of retribution. Reputational and legal risks pose major threats to financial services firms because the nature of their business requires maintaining the confidence of customers, creditors, and the general marketplace.