Abstract

Aligning Risk Management and Corporate Strategy

Kirsten Bremke, Johannes Bussmann and Niclas Storz

A.T. Kearney GmbH

The competitive positioning of banks is increasingly driven by the optimiszation of shareholder value and by the growth of risk-adjusted profitability. Linking risk management and strategic planning to strategic and value-oriented risk management is thus becoming a key success factor for banks, and this can be achieved by allocating capital to business units efficiently. Among various methods developed over the last few years for allocating capital, a combined "asset volatility" and "earnings volatility" approach is recommended.