Conducted by Moore, Carter & Associates with Professor Andrew Kakabadse of Cranfield School of Management, this survey examines: the causes of the banking crisis; the extent to which failures of risk management and governance of risk and regulation contributed; the nature of those failures and the need for internal and regulatory change.
"It is hard to read the results of this survey without concluding that the 2008 banking crisis - estimated by the IMF to have cost $10 trillion - was entirely avoidable. Only three respondents out of 563 agreed with Gordon Brown that the most important cause of the crisis was "global economic circumstances beyond anyone's control."
"The most remarkable finding of the survey is that most risk professionals - on the whole a highly analytical, data rational group - believe the banking crisis was caused not so much by technical failures as by failures in organisational culture and ethics.
"The picture that emerges from the survey is clear. Most risk professionals saw the technical factors which might cause a crisis well in advance. These included easy availability of global capital, excessive leverage and accounting standards which permitted over-valuation of assets. The risks were reported but senior executives chose to prioritise sales. That they did so is put down to individual or collective greed, fuelled by remuneration practices that encouraged excessive risk taking. That they were allowed to do so is explained by inadequate oversight by non-executives and regulators and organisational cultures which inhibited effective challenge to risk taking."
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