There's more risk recruitment to come

The Central Bank (among others) has spent the last week recounting how the risk management failures within Ireland's large domestic institutions led to the country's banking crisis.

The domestic banks have supposedly been strengthening their risk functions over the last 18 months, meaning it has been the place to work during the economic downturn. But has enough been done, or is there more hiring on the cards?

Central Bank governor Patrick Honohan elaborated on his report on the major failings of the bank at an Oireachtas committee this week, citing "now famous" regulatory investigations that revealed a catalogue of errors.

"They didn't know the overall picture," he said. "What that should have triggered was alarm bells, escalation, bank managers carpeted by the regulator and told this was a serious problem."

Inevitably, this has meant that banks have had to address this, elevating risk managers to ever-more important roles, transferring people internally into risk functions and recruiting externally.

Is this boom time for risk professionals showing any sign of abating? It appears not.

"There's been a huge demand for credit risk managers within the domestic institutions," says Eoin Blake, director of Irish headhunters Lincoln Search & Selection. "One client of ours recruited a large team of risk professionals for a particular project, and then immediately awarded a mandate for a similar number for another project. It's been a very active area."

Bank of Ireland has been particularly active in recruiting credit risk modelling expertise, while AIB has been looking to recruit restructuring and loan workout professionals, according to recruiters.

"Banks continue to express a desire to beef up their risk management teams," adds Robin Craig, director of recruiters Careers Compass. "However, a large number of people have been shifted internally due to restrictions the banks have placed on themselves when it comes to adding headcount."

Before the crisis, corporate banking teams were very sales focused, and loans were often issued based on existing relationships rather than strict credit criteria.

"There's a desire to recruit very quantitative people to address this technical shortfall and create a more risk-aware approach, but this needs to be combined with knowledge of the domestic market," adds Blake.

The issue of better risk management within Ireland's banks certainly isn't something that will be quietly brushed under the carpet. The Central Bank doesn't plan on launching a full-scale inquiry, but recommended further independent reports on the matter.

"We have learnt from our mistakes," he said, before adding: "I believe it would be useful to commission independent reviews of risk management and governance of these matters for at least the two big banks."