The Bank of Portugal has spent the past eight years developing its comprehensive risk framework, which covers strategic risks, as well as financial and non-financial risks. As part of this long-running effort, the eurozone central bank has established an effective risk management committee. And, in the past year, it was able to undertake important risk-related exercises, such as an asset management review.
Gabriel Andrade, Bank of Portugal
The creation of an integrated risk management department and the reform of its risk framework was initially supported by former governor Carlos Costa, and the current governor, Mário Centeno, and board member Ana Paula Serra have also backed the effort. “[Without their leadership and support], we wouldn’t have evolved so much over these eight years,” says Gabriel Andrade, director of the central bank’s risk management department. Indeed, Centeno has supported even “faster development” of “some of the initiatives we had in the pipeline”, including “the board’s strategic risk assessment”, adds Andrade.
Prior to its overhaul, the Bank of Portugal ran risk via a middle office within the markets…
