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Crisis Management

If Risk Management has a proactive approach, of collecting Risk Ratios and presenting the situation in an integrated manner, Crisis Management has a more reactive role of preparing the response when the situation so requires.

Crises may have many sources, from local ones to those generated by international circumstances, from the liquidity crisis to the crisis generated by the collapse of a critical infrastructure (whether it be a clearing company, a central depository or a company offering outsourcing services) or crises generated by operational risks (e.g. major fraud).

Crises cannot be eliminated; this is why, at an integrated level, there should be plans to ensure the business continuity and recovery plans in case of crisis. All these aspects should be analysed, inventoried, regulated and monitored.

At an international level, there is a new approach to the content and the structure of crisis regulation, supervision and management due to the failure of the supervisory method philosophy of the past 20 years. The old approach was manifested through an extensive focus on microeconomic risks using risk-sensitive techniques based on the market, which in the face of extreme events may exacerbate systemic risk rather than reduce it.

In 2007, the European Parliament published the study “Financial Supervision and Crisis Management in the EU” proposing a new approach to crisis management.

In 2012, the European Commission launched CONSULTATION ON A POSSIBLE RECOVERY AND RESOLUTION FRAMEWORK FOR FINANCIAL INSTITUTIONS OTHER THAN BANKS, discussions that will result in a new crisis management framework, considering the worldwide relations.

Also, due to the dematerialization of transactions, of the critical infrastructures and of the use of information technologies, the following measures are essential:

  • against systemic risks arising from the effects of cybercrime and failure to take appropriate technical measures
  • to reduce the negative effects of cybercrime, of recovering and restoring business after a crisis.

This is why we need:

  • principles and procedures for the management of crisis situations;
  • a system for the collection, analysis, warning and response to incidents and crises;
  • to define, identify and develop procedures for critical financial infrastructures, suppliers of outsourced service, suppliers of computer and communications systems whose impact may generate crises;
  • to design crisis situation simulations, emergency plans and to conduct simulations;
  • to participate in the activity of the National Committee for Financial Stability within the structures and in connection with the topics relating to crisis management;
  • exchanges of information inter-institutionally, nationally and internationally.