The global financial crisis had many causes, but failures in risk management were clearly a contributory factor. Although there were technical shortcomings, especially related to the use of risk models and metrics, a more widespread problem was a failure of governance, which meant that the legitimate warnings of risk managers went either unheeded or unnoticed. In the euphoria of the credit bubble preceding the crash, a culture in banking and insurance that prioritized short-term gains over prudence all too often rode roughshod over the concerns of risk managers. Many senior executives were more concerned with outperforming revenue and profit targets than paying heed to growing risk concentrations.

• Insurance. Insurers have mostly weathered the financial crisis well and the majority are optimistic about the future. Although there have been notable exceptions, most insurers have come through the crisis with no need for state support, and their business models and risk management processes have proven to be quite robust.

• Investment Banking. Investment banks enjoyed a strong year in 2009, thanks to the actions of policy-makers, such as stimulus packages. But the risk of complacency remains. After the turmoil of the global financial crisis, investment banks enjoyed a spectacular rebound in the second half of last year.