Welcome to SERRAQ!

It’s almost 20 years ago that I was asked by the Chase Manhattan Bank’s COO, Rick Mangogna, to form and lead a team with a mission to design and implement a risk reporting framework for global operations. We soon understood that achieving our mission depended on the successful definition of a common risk measurement method that could consistently and reliably identify, quantify, aggregate and compare all the diverse exposures to risk present in bank operations.

Under Rick’s sponsorship we codified and implemented such a solution that was deployed in the bank’s principal operations centres. The breakthrough thinking behind the solution was the definition of a new common, additive risk metric to express the diverse risks inherent in operational processes. We called it a ‘Risk Unit’ or ‘RU’.

After I left Chase Manhattan (JPMorgan Chase) in 2003 my career took an academic turn and I was privileged to work with some impressive thinkers in the accounting, finance and risk domains. Our collective aim was to upscale the risk quantification technique pioneered at Chase Manhattan and adapt it for application to all types of non-financial risks in all industries.

In this endeavour, I’m particularly grateful to Allan Grody who provided great insight into moulding the technique we now call ‘Risk Accounting’. Professor Grody (now retired) founded and taught the only graduate level Risk Management Systems course at NYU’s Stern Graduate School of Business. I also collaborated with Professor J. S. Toms of the Leeds University Business School and Professor K. J. Fernandes, Professor J. Williams and Professor Dennis Philip of the Durham University Business School who added their considerable expertise and intellect in shaping the method.

We are now embarking on the next important leg of our journey as we set out to transform our academically constructed theoretical risk quantification, aggregation and reporting tool into a valuable and universally adopted business accounting method. The vehicle we have created to support that journey is SERRAQ which is a not-for-profit entity designed to oversee the development of the Risk Accounting method and the related new profession of Risk Accountant.

In the pages of this website you will find information that we hope will trigger your interest in supporting this endeavour either as an individual or corporate member. Details of how to apply for membership are provided.

Finally, as the academic codification of the Risk Accounting method progressed we were fortunate to discover Sinoptix, a European software company that has done a superb job of developing a prototype Risk Accounting software solution called ‘MetRisQ’. For more information on Sinoptix and the software, visit the MetRisQ web page. We are particularly keen to hear from prospective corporate members who may be interested in testing and validating MetRisQ in proof-of-concept projects.

We look forward to enjoying a long, productive and professionally stimulating relationship with our members.

Peter Hughes

Chairman of the Risk Accounting Standards Board

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