Risk Culture, Neoclassical Economics, and Enterprise Risk Management

Ingram D, Underwood A, & Thompson M (2014). Risk Culture, Neoclassical Economics, and Enterprise Risk Management. Research Paper, presented at the Enterprise Risk Management Symposium, 29 September-1 October 2014, Chicago, IL, USA

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Abstract

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 Neo Classical 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 Neo Classical Economics beliefs.

Item Type: Other
Uncontrolled Keywords: Insurance; ERM; Risk culture; Plural rationality theory; Risk appetite; Risk tolerance; Chief Risk Officer; Tone at the Top
Research Programs: Risk, Policy and Vulnerability (RPV)
Risk & Resilience (RISK)
Bibliographic Reference: Research Paper, presented at the Enterprise Risk Management Symposium, 29 September-1 October 2014, Chicago, IL, USA
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:51
Last Modified: 04 Apr 2016 10:15
URI: http://pure.iiasa.ac.at/11183

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