Risk management important for firms

Firms of all sizes are being encouraged to more proactively assess risks to their firms during 2007.

The Financial Services Authority (FSA) has outlined the risk it believes firms will be subjected to in the coming months.

These include geopolitical risks, increasingly complex financial markets and the low volatility of asset prices.

Callum McCarthy, chairman of the FSA, said firms should consider risks they may be faced with and to plan accordingly.

"Stress testing and scenario analysis enable firms to assess and mitigate the risks that face them," he added.

Mr McCarthy also said that in the current climate, if problems were to occur they might be on a larger scale than previously.

"This has implications for both providers and consumers of financial services," he added.

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