Enterprise Risk Management -- Canadian Best Practices: How Did They Get There?

Abstract

Canadian banks are now ranked at the top of Bloomberg's strongest banks. But the question is: how did they get there? To understand this, it may be helpful to examine how enterprise risk management (ERM) has evolved in Canada. This article illustrates the development of Canadian bank ERM best practices, and suggests three possible factors that may have led to ERM best practices in Canada. First, a beneficial environment of strong regulation and economic stability, second, burning platforms of substantial loss events which lead the leadership of Canadian banks to prioritize ERM, and third, the examples of ERM best practices capabilities of people, processes, systems, and data at each of the five Canadian banks.