Which of the following were examples of risk management deficiencies that lead to the GFC: i.risk being monitored at the individual level rather than the entity level.
ii.information about risks not reaching the board.
iii.the organisational culture of 'pursuing growth in profits'
iv.remuneration packages for high risk activities
v.alerting shareholders to a potential investment with a high return

Question

Quizplus · Accepted Answer

i, ii, iii, and iv were indeed risk management deficiencies that contributed to the Global Financial Crisis (GFC). Monitoring risk at the individual rather than entity level, information about risks not reaching the board, a culture focused on profit growth, and remuneration packages encouraging high-risk activities all played a part in the crisis. Alerting shareholders to a potential investment with a high return is not inherently a risk management deficiency.

Which of the Following Were Examples of Risk Management Deficiencies