So, most of the risk management that occurs in an organization will be done by people who don't have the word "risk" in their job title. And third, risk management could be misinterpreted as an attempt to create a contingency plan for every possible thing that could go wrong. It is important to prepare by scanning the horizon, exploring the range of possible futures, and understanding how those futures could help or impair desired outcomes. We do want to invest in effective responses to key scenarios. However, no organization has the resources to prepare for all possibilities. And, no matter how creative we are, we still can't imagine every one of them anyway. As it is said, "Things that have never happened before happen all the time. "3 So, effective risk management is more than planning. It is creating the capacity to adapt to and recover from unexpected shocks, which is what we often mean when we talk about resilience.4 To me, successful risk management is as much about culture as it is about structure. My version of the saying "culture eats strategy for breakfast" is: "culture eats structure for breakfast. "5 Practically speaking, we have policies, procedures, and rules to help us make decisions. But, much of the time, decisions aren't clear, and it is organizational culture that shapes the tradeoffs that we make and the actions we take.
·  Second, the New Accord will recognise that some banks treat their smallest business credits as retail exposures. In these cases, banks group and administer their small business loans on a “pooled basis,” similar to the way they manage most small personal loans. The New Accord will permit aggregate exposures to a single business borrower of up to € million to be treated as retail exposures. Because retail exposures enjoy a preferential treatment under both the standardised (reduction of risk weights by 25 percentage points, from 100% to 75%) and IRB (a different risk-weight curve) approaches to credit risk, banks making such loans may face lower capital requirements than are currently applicable. Moreover, for those who have monitored our work closely, the Committee recently eliminated a controversial requirement governing the “granularity” of such loans. In plain language, the rules will no longer require that retail portfolios contain exposures to a minimum number of unrelated parties. Instead, national supervisors will determine whether such portfolios qualify for retail treatment. Although the media has not reported on this change widely, it is quite important because it will help more banks to enjoy the preferential retail treatment for their smallest business credits. 2  BIS Review 32/2003  ·  Finally, the New Accord will recognise a far wider range of collateral and guarantees than the current rules do.