ERisk's Lam Highlights Challenges for Post-WTO China; Beijing Speech Calls Enterprise Risk Management Crucial for Optimizing Capital Markets Mechanisms

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ERisk's Lam Highlights Challenges for Post-WTO China; Beijing Speech Calls Enterprise Risk Management Crucial for Optimizing Capital Markets Mechanisms

Friday, October 27, 2000

Beijing, China - James Lam, founder and vice-chairman of ERisk, the market leader for fully integrated enterprise risk management (ERM) services, presented a keynote address today at the International Conference on Financial Globalization and Risk Management in Beijing. With China preparing to enter the World Trade Organization in 2001, Mr. Lam spoke on the challenges facing post-WTO financial industries in the region and the growing need for implementation of enterprise risk management programs.

"Enterprise Risk Management represents both a public and private-sector imperative for post-WTO China," said Lam. "Regulators in China can adopt ERM standards to promote the self-regulation and transparency of risks, as well as establish examination procedures, risk-based capital requirements, and other regulatory safeguards. For companies in China willing to implement comprehensive ERM programs and take on the challenges of this new environment, the opportunities to establish strong risk management and improve business performance are terrific."

With an unforgiving stock market and ongoing industry initiatives, Lam suggested that there are an increasing number of chief risk officers being created to integrate risk management strategies, products and reporting from the executive level. The CRO position works to provide a more comprehensive view of risk and to more readily improve a company's bottom-line.

Lam also warned of the dangers of not managing risk for both individual companies and economic regions. "Financial disasters such as Barings, Kidder, and Daiwa were strong wake-up calls for companies to manage not only credit and market risks, but also operational risks," said Lam. "Meanwhile, the Asia economic crisis and the Russian debt default reminded us all of the interdependencies of global economies and the threat of systemic risks."

Lam also touched on a number of challenges for a post-WTO China, including implementation of proven best practices, the need for risk-based capital requirements, and having regulatory frameworks to reinforce risk standards.

"China needs more effective capital markets mechanisms to ensure the free flow of capital into good businesses and out of bad ones," said Lam. "Additionally, having banking and regulatory frameworks will provide more rational oversight."

The conference was co-sponsored by China Finance Society, China Banks Association, People's University of China, Global Association of Risk Professionals (GARP), and SigmaTrek Inc.

CONTACT: Tony Marcos, ERisk 212-819-0170 or Jeremy Milner, Arnold Public Relations 617-587-8921