Credit Crunch

The severe global financial crisis that began in 2007-2008, triggered by failures in the subprime mortgage market and resulting in a liquidity crisis in the banking system. The Credit Crunch revealed significant weaknesses in risk management practices, particularly in financial institutions that failed to understand their risk exposures and operate within appropriate risk appetite boundaries. It highlighted the consequences of divorcing risk management from strategy, demonstrating the need for integrated approaches like RBPM to ensure sustainable strategic execution.