Strengthening Financial Risk Governance and Compliance in the U.S.: A Roadmap for Ensuring Economic Stability

Abstract

While US lawmakers consider loosening financial regulations, this article addresses the need for stronger financial risk governance frameworks to ensure regulatory compliance and mitigate systemic risks in the U.S. financial system. It provides a road map for financial institutions and policymakers to enhance risk management processes and avoid failures in a volatile economic environment. The only significant advancements in the monitoring and regulation of the financial sector in the United States have come from financial catastrophes. Achieving sustained growth and low inflation is contingent upon the financial system’s stability, demonstrated by well-functioning financial institutions operating without significant difficulties. Due to the global financial crisis, banks' corporate governance procedures have been reexamined. Some policymakers are wondering how much managerial entrenchment and the board's failure to keep an eye on executives may have contributed to excessive risk-taking and financial instability. The implementation of favorable policies has been critically examined to ensure the suitable delivery of a stable in the United States.