Every global economic bolt reminds us of the pain of a receding economy and why risk management is ever more critical in today’s world. The recent Dubai debt crisis brings back the golden words of “Risk Management”. A year ago, the collapse of Lehman Brothers led to large scale meltdown making the world realize the importance of risk management, why risk management failed, why stress testing and models did not work etc. So, why does a fallout reflect on importance of risk management. Is it because in times of losses, every possible loss preventing aspect is remembered. Or is it that risk management today is really an important function. Looking deeply into the subject, we note that risk management function is no longer a support function that churns out reports and monitors business activities. It is growing up the corporate ladder in the Board room. Today, risk management reports are very detailed and project more into the future about what could go wrong. CRO’s reporting is shifting from CEO to Board level committees and his task is no longer to manage risk, but also to predict the impact of emerging risks. Risk Management departments are expected to save global large scale financial crisis. In our opinion, this may be possible, because if most businesses were to act upon the recommendations of their risk managers, certain loop holes are bound to be prevented. Taking the 2008 financial crisis for example. Even if one bank had faulty models or credit risk rating methodology, another bank’s risk manger would have a right method. This would have prevented the whole herd of banks from making the same mistake simultaneously because some banks would listen to their risk managers. In short, systematic large scale failures can be prevented if risk management recommendations are implemented by some organizations.