However, we can prepare for it well in advance it if we know how it would impact on us, if and when it comes, and plan in advance the right level of resources to withstand it. We can do this if we have the capability to perform on a regular basis, the suitable stress testing and scenario analyses.
•  A proactive risk culture must exist in an institution to ensure effective risk management A proactive risk culture means there is awareness of risk within an institution which permeates the actions and words of all the members of the firm. This can be done through regular risk awareness activities, education, open communication lines among units/groups concerned, and continuous interaction with senior management.