Successful risk management looks comprehensively across business lines and is fully integrated into the decisionmaking of senior management. It identifies stresses and scenarios that might seem remote, but that could threaten safety and soundness. Banks' own self-interest clearly provides a strong incentive to improve risk management, but better risk management at the largest banks would benefit the broader financial system, too.
A more resilient financial system will also require banks to strengthen all aspects of the originate-to-distribute model. They need to pay more attention to origination, including when they are distributing credits they have not originated.