Risk Manageemnt without markets
The real test of risk management is provided by the financial Darwinism of the markets. By reading market signals about products--pricing of assets, pricing of insurance on those prices--banks develop models that can inform them about risk. By reading market signals about their own financial health--their cost of capital, their borrowing cost, the cost to insure their debt, the willingness of customers to enter into trades--risk managers get a view about the risks of their own portfolios and the strength of the business model.
-- John Carney.