Institutional Risk

The concept of institutional risk is defined as the risk that the regulator will not meet its organizational and policy objectives. The counterpart of institutional risk is societal risk, that is, the risks in society that regulators are entrusted to manage. In recent decades risk management has for various reasons become an attractive solution for societal regulation on all levels. Despite this successful risk colonization regulators increasingly seek to protect the institutions that manage social risks against criticism from the public. This leads to a spiraling, even pathological, effect whereby risk management expands even further to new societal domains and increasingly centers on the reputational risks of risk management institutions.