ATLANTA – The tone at this year's NCUA Risk Mitigation Summit had a more practical and urgent one.
Nearly 60 attendees came out today for the third annual summit, the brainchild of NCUA Vice Chairman Rodney Hood who reminded the audience that "risks must be managed, not avoided." The day-long sessions held at the Federal Reserve Bank of Atlanta focused on interest rate, operational, credit and reputation risks as well as national trends.
"We've gone from advocating risk management to looking at [asking] 'why does my credit union need it,'" Hood told Credit Union Times. "Three years ago, it was 'what is it.' Now, it's 'how can I do [risk management].'"
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Christopher Brown, senior vice president and chief financial officer at the Federal Reserve Bank of Atlanta, said the regulator's enterprise risk management program has been in place for five years and encompasses a number of areas. The Fed's approach to ERM keeps in mind that communication is valuable, management ultimately owns the risks and rising above silos helps to gain different perspectives, Brown said.
The newly formed Retail Payment Risk Forum was created to start a dialogue on mobile and Internet payments and identifying potential risks there, Brown said.
Above all, "reputation risk is the hardest to quantify" because it's "hard to measure and hard to get your arms around it," Brown said. It's probably among the most critical to monitor because it "keeps you in business," he added.
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