Making the most of a principle-based system
Last updated 12th April 2010 - This note discusses the principe-based approaches to risk and capital.
Globally, risk-management rainmakers have embraced principle-based approaches to risk and capital as a best practice to which we should all aspire. But, as with anything else, the beauty of a principle-based risk measurement system lies in the eye of the beholder. To purists, current practices and future intentions may appear to fall short on some of the fundamentals that differentiate a principle-based risk measurement system from the prescriptive approaches that they replace.