The Forum on Reputational Risk Management in Banking was established in 2007

• to provide a platform for dialog and knowledge-sharing on common and best practices in reputational risk management, and
• to work towards a shared set of principles in reputational risk management in the banking industry, based on best practice elements.

The global crisis in the financial sector led to unexpected and severe consequences for the entire industry. We believe that reputational risk management has become even more important after the financial sector lost a significant share of its most vital asset: its good reputation.

Recent developments have shown the impact that reputational risk events can have on a bank’s bottom line, and there is a growing consensus that the management of reputational risk should be integrated into the overall risk management structure.

BIS Requirements

In the 2006 Basel II framework, the Basel Committee on Banking Supervision clearly indicated that it expects the industry to develop standards for reputational risk management.

In July 2009, when the Basel Committee on Banking Supervision approved a final package of measures to strengthen the three pillars of the Basel II framework, a definition of reputational risk was given and, for the first time, detailed requirements for reputational risk management were defined:

a) banks should have policies in place to identify sources of reputational risk,

b) stress testing procedures should take account of reputational risk, and

c) methodologies to measure the effect of reputational risk in terms of other risk types (e.g. credit, liquidity, market or operational risk) should be developed.

In October 2010, the Basel Committee released "Principles for enhancing corporate governance" to address deficiencies in bank corporate governance that became apparent during the financial crisis. This document provides additional guidance relevant to reputational risk management.

How You Can Join

The Forum is intended to be a platform for dialog on common practices in reputational risk management in banking. We are happy to enlist additional banks.

Each Forum is hosted by one of the participating financial institutions; it is organized and moderated by ECOFACT.

The Forum is an invitation-only event, targeted at practitioners and decision-makers in risk and compliance management. The number of attendees is limited, so that participants have time to discuss their inputs.

If you represent a bank, we would like to share the results of the Forum with you. As is the case with existing Forum participants, this requires you to provide the Forum with a brief description of the reputational risk management practices at your bank. In return, you will gain access to the restricted member area, with the individual contributions of all members as well as the findings of Forum events. In addition, you will be invited to all follow-on events.

All Forum participants and additional contributors can access full Forum documentation in the restricted member area.

For more information please contact us via e-mail () or call Olivier Jaeggi on +41 44 350 6062.