American Sociological Association

Current Members

Study: Banks Hired Risk Officers to Mitigate Risk in Years Before Collapse. It Didn’t Go So Well

New research suggests a significant number of national and international American banks hired new Chief Risk Officers to mitigate risk but may have actually helped lead the industry into widespread insolvency.

Starting in the 1990s, many major banks hired Chief Risk Officers (CROs) in a response to new laws and regulations put in place following financial meltdowns in the 1980s. In an effort to comply, banking officials elevated risk analysts to corner offices to show they were serious about tackling risk.