Financial regulators, rating agencies and many commentators have blamed weak risk culture for many of the large losses and financial company failures of the past decade. But their exposition regarding a strong risk culture only goes as far as describing a few of the risk management practices of an organization and falls far short of describing the beliefs and motivations that are at the heart of any culture. This discussion will present thinking about how the fundamental beliefs of neoclassical economics clash with the recommended risk practices and how the beliefs that underpin enterprise risk management are fundamentally consistent with the recommended risk management practices but differ significantly from neoclassical economics beliefs.
Risk Culture, Neoclassical Economics and Enterprise Risk Management
Society of Actuaries (US)
Length of Resource