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Walker review ups liquidity risk ante for CRO

Walker review ups liquidity risk ante for CRO

JWG-IT publishes new governance report to help with last minute programme change 

London – 22 July 2009.  It had looked as if the treasurer’s shiny new risk silo gifted by Lord Turner might just get him closer to the board until Sir Walker weighed in last week.

David Walker’s review of risk governance has rained on the parade by giving the Chief Risk Officer (CRO) the job of formulating and monitoring the effectiveness of liquidity risk policy.  This move will come as a surprise to the back-office fraternity as liquidity risk programmes have been up to now seen as the purview of the finance and treasury departments.

The review mandates that the CRO be in a position to stand up to and contravene business decisions.  Walker goes as far as assigning protection for the CRO’s job to the Chairman himself.  Clearly, with great power comes great responsibility.

But how will they get the data to perform this task?  Walker does not bother with the details, and his analysis of information infrastructure is limited to the statement that “if the quality of the executive team is below par or management information systems do not assure an adequate information flow to the NEDs, no amount of financial industry experience among the NEDs will right the situation until deficiencies in the executive are dealt with”.

This means that CROs across the City need to start cracking open their project management text books.  PJ Di Giammarino, CEO of the JWG-IT think-tank, commented “In talking to liquidity risk implementers, it had been primarily the CFO and treasury communities that were driving the decisions on what data they need to do their jobs.  However, the main focus today is on compliance with regulatory requirements, rather than the bigger risk picture.”

Anita Millar, proprietor of ADM Risk, Regulation & Strategy Ltd, adds “Walker fails to promote connectivity between the board and the firm.  For example, without the capability to monitor, report and escalate information that approximates real-time, firms will be challenged to meet some of the information requirements that appear to be suggested by Walker’s proposals.”

ADM and JWG-IT have released an analysis report which identifies ten tests that can be employed by senior managers and executives in financial services firms to evaluate whether their risk governance supports the objectives typically set for a firm’s risk framework.  This paper is available free at

About JWG-IT Group Limited

JWG-IT is the only financial services industry think-tank to facilitate collaborative work to resolve industry issues created by regulatory change.  Based on a working model started in 2005, JWG-IT has established strong relationships with EU administrators, leading firms and companies.  It is neither lobbyist nor consultancy and revenues are restricted to membership and event fees and content sales.  The JWG-IT Think-Tank is designed to help members and participants manage regulatory-driven change better, quicker, cheaper and with less risk.  JWG-IT launched the Customer Data Management Group and the Liquidity Risk Action Network in 2008.  For more information, see

About ADM Risk, Regulation & Strategy Ltd 

ADM is a risk, regulatory and strategic consultancy focused on enabling financial services firms to successfully meet the challenge of regulatory change in the financial services sector.  ADM helps firms make sense of their regulatory environment and supports the creation and on-going development of effective risk management and control structures underpinned by solid corporate and risk governance.  For more on ADM see   


For immediate release

Business contact:  PJ Di Giammarino,, +44 (0) 7811 430 503

Communications contact:  Louisa Excell, +44 (0) 20 7608 8350

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