The recession did two things to financial institutions' consumer credit risk management
strategies. First, it drove lenders to develop more robust strategies to curb excessive risk-taking, and second, it drew back financiers' willingness to take risks. But with recent improvements in market activity - such as capital investment, startup volumes and business expenditures - organizations appear to be more willing to take on risk. A report released this week by JPMorgan Asset Management shows company treasurers have a greater appetite for risk, as they navigate an environment replete with low-risk interest rates and high levels of surplus cash. Treasury departments now cite risk management as the third-highest area of importance, up from fifth in 2010. Treasurers also claim that the financial strength of an institution is now the most important factor in selecting a primary bank, overtaking relationship management for the first time. "2011 has been a challenging year for treasurers as they walk a 'tightrope' between their appetite for yield on one hand and their caution about risk on the other - a delicate balance that was summed up by one treasurer as 'managing the margin: getting the best return for minimum/zero risk,'" said Robert Deutsch, head of global liquidity at JPMorgan AM.