Risk measurement has been part of the regulatory agenda in financial services since the first Basel Capital Accord was introduced in 1988. This and subsequent capital accords presumed that the disciplines developed to report on regulatory capital through the Basel lens would, in turn, spawn innovation towards embedding a risk culture and engendering a thoughtful understanding of risk appetite in financial firms. However, these ambitions have remained largely unfulfilled as evidenced by the global financial crisis that materialized even though the evolved discipline of risk management was all about its prevention.
