Turmoil in the financial markets has completely transformed the risk landscape, according to a survey by the Centre for the Study of Financial Innovation. The poll of banking risk, based on the views of nearly 300 senior financiers from 38 countries, is dominated by concerns about market conditions, notably the liquidity shortage and the crunch in the credit and derivative markets. Fear that this will lead to a global recession is high. The crisis has exposed a failure of controls within banks due to factors such as growing complexity of finance, distorted incentive structures and insufficient regard to risk management, according to the survey.
Top risks facing banks (last year in brackets):
