Risk Appetite Frameworks: Evolving Practices

During Spring 2020, at the height of the COVID-19 pandemic, the IACPM revisited a benchmarking study on Risk Appetite Frameworks (RAF) last conducted in 2014.  The 2014 study can be accessed here>.

The survey explored evolving practices across the industry in light of emerging risks such as Cyber, ESG and especially Climate Risk and other risk management priorities.

  • Challenges in developing Risk Appetite Frameworks
  • Granularity and internal cascading
  • Utilization of stress testing scenarios
  • Metrics and limits – including new metrics for ESG and Climate Risk
  • Governance and Risk Culture

57 IACPM member firms participated in the study, including 50 banks, six Development Bank, and one Insurance Company;  more than half have a total balance sheet size above USD 500 Billion.

Detailed results will be shared with participating IACPM member firms once they have been finalized.