While our financial system as a whole was not directly affected, the global crisis was one factor that contributed to collapse of the region’s major conglomerate, CL Financial (CLF) and the difficulties faced by its two main financial entities, Colonial Life Insurance Company (Clico) and the Clico Investment Bank.
Financial institutions have made significant progress in the management of these risks and Pakistani banks have considerably improved their processes for identification and management of credit and market risk exposures. By contrast, it is relatively difficult to measure the level of operational risk exposures on an enterprise wide level. The global financial crisis has also demonstrated the cost of operational risk failures.