The survey shows that financial leaders acknowledge that greater regulation is needed to restore confidence and address shortfalls in behaviour. However, they remain unconvinced about the benefits of a single global regulator, preferring instead a more direct approach to resolving risk issues that involves practical solutions across people, culture, process and technology.

The survey was aimed at directors, CXOs and senior level executives with responsibility for risk management and showed that most respondents accept that the recent financial crisis was amplified by a short-term outlook and a lack of focus on longer-term, underlying issues concerning financial risk. 83% of respondents agreed or strongly agreed that business priorities had shifted too far to the short term and more than 70% saw the use of similar pricing and risk models across many firms contributed to market volatility.

When asked about future risk management strategies, it was clear they felt there should be a greater emphasis on risk management, yet lack of staff with the right skill set may hinder progress in this area. More than 75% of respondents felt that a shortage of appropriately skilled people will slow down the progress in risk management.

The survey identified that the reality of the current market means that there should be a greater emphasis on a wider range of risk scenarios, even those previously viewed as unlikely, but that recent experience has shown are possible. One of the strongest findings from the survey was the need to promote a risk management culture across all departments and shift the emphasis more from trading to risk functions. It was also agreed that senior management should have greater involvement in risk analysis, including the identification of risk and the implementation of risk strategies, however there were mixed responses about mandatory sign-off of risk functions by senior management.

To help evaluate risk more effectively, vely, respondents felt that better data quality would help to improve the identification of risk across all financial transactions. To obtain this level of data quality, respondents identified the need for better enterprise-wide management tools and techniques.

John Cant, Managing Director of MPI Europe comments: "Clearly our financial leaders understand the weaknesses within the previously accepted market norms for risk management and are keen to work quickly to resolve some of them. Therefore simply waiting for a unified regulatory approach may reduce the speed by which financial organisations can address the risk management issues which are important for stability and survival in the current volatile environment. There is a need to formulate more robust risk management strategies sooner rather than later."

The Risk Management Survey was conducted as part of FS ThinkTank and is supported by Sun and Computacenter.