Leaders of the financial services industry in the region have been urged to learn lessons from the current economic turmoil by undertaking a realistic assessment of the risks to their businesses. Speaking at a seminar organized by insurance brokers, SABB Insurance Services Limited, David Breden, head of Operational Risk Practice at HSBC Insurance Brokers in London, told delegates: “After a decade of uninterrupted growth in the world economy, many in the financial services industry were unprepared for the crisis. They did not believe there could be circumstances that might cause their businesses to fail despite the fact that all regulators require companies in the sector to examine every potential risk.” “Recent events have changed that attitude. Now financial services businesses are looking at risk realistically and that means looking at the factors that could cause the worst to happen. The region's financial services businesses need to do the same even if some countries appear to have been cushioned to some degree from the full effects of the global economic downturn.” Breden said financial sector firms must evaluate the potential downsides of all proposed actions, including investigating the circumstances that could cause the business plan to fail, and decide how to manage the risks to ensure they are able to survive if things do not go as planned. He told delegates that in the current climate, it was hard to see a value in financial institutions adopting a high risk strategy. There was a wish to avoid unexpected losses that may threaten profitability and share price and undermine confidence in the firm. “So we should expect a risk averse stance which provides opportunity for products and services that can limit risk - such as insurance.” SABB Insurance Services, the organizer of this seminar, is a joint venture insurance broking company between SABB and HSBC Group. The company provides high-end brokerage and insurance advisory services to corporate, commercial and private banking clients. Meanwhile, Switzerland and the United States have initialled an agreement on a revised convention governing double taxation, the Swiss Finance Ministry announced on Friday. It said the new arrangement would take into account OECD-recommended standards on exchange of tax information. __
