"If a bank is serious about risk management, then it will be serious from the top down.” Before discussing this statement, it is important to understand the events that precipitated it.

The chain of events that led to the global economic crisis are outlined in figure 1. The resulting global economic downturn led to a vicious cycle of companies failing or downsizing, thus leading to unemployment, which further reduced demand for goods and services. In addition, banks across the globe retrenched and in place of the liberal lending practices credit tightened across the board. Governments stepped in with fiscal support—the likes of which has never been seen in modern recorded history. And now, everyone waits to see what will happen with this never-before-tried experiment of flooding the world markets with government money.