The risk management systems must take into account the technical limitations of risk models, such as Value at Risk (VaR). Stress testing and scenario analysis need to be established as truly effective management tools and should be integrated and standardized across business lines, types of risk and asset classes.
Despite the significant challenges that weigh on the global outlook, financial conditions remain very stimulative and investors have become noticeably less risk averse.   In Canada, recent economic activity has been stronger than anticipated, although the profile is largely consistent with the underlying dynamics outlined in January.