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Enterprise Risk Management

Enterprise Risk Management (ERM) has evolved over the years and taken on increase importance due to the current economic environment as well as increased regulatory attention. While there are many components to ERM probably the three major categories are Credit Risk, Interest Rate and Market Risk, and Operational Risk. The later is probably the hardest to get your arms around but there are systems that can help with this such as WolfPAC by Wolf & Company in Boston. For Interest Rate and Market Risk there are quite a number of systems that can help such as those offered by friends of ours at DCG Consulting in Newburyport, MA.

Probably the single largest risk category is Credit Risk, which is addressed by the Madison System. But, while credit risk may be the credit risk implications need to be evaluated along with any operational risk implications.

A well rounded ERM system will rely on systems such as the Madison System, and the others such as those mentioned above, to assist in the process of measuring the risk and the profit, as well as assisting in managing risk on a going forward basis.