What is the primary role of the government in risk management?

The primary role of the government in risk management is to regulate and ensure that effective risk management practices are implemented. This involves establishing and enforcing regulations that set standards for risk assessment and management across various sectors. By doing so, the government helps to protect both consumers and businesses from uncertainties that could lead to financial loss or harm. Regulations may include requirements for businesses to have appropriate risk management procedures in place, as well as oversight to ensure that these practices are actively followed.

Furthermore, effective regulation can enhance public confidence in systems like finance and insurance, ultimately contributing to stability in the economy. It is important for the government to ensure that organizations are prepared for potential risks and can respond appropriately, thereby fostering a safer and more resilient society.