Even before the world plunged into financial crisis, risk management was high on the "worry list" of trading houses: 2008 has been marked by a string of trading incidents that exposed big holes in risk practices.

In January, Société Générale revealed that unauthorised dealing by Jérôme Kerviel, a futures trader in Paris, had resulted in losses of €4.9bn ($6.6bn) for the French bank, the biggest rogue trading scandal in history.

In February, MF Global said Evan Dooley, a wheat trader at its Memphis office, had racked up $141m of losses in unauthorised trading, the largest unauthorised loss in agricultural markets.

In March, Credit Suisse dismissed traders in London and New York who had triggered a SFr2.86bn ($2.51bn) writedown by deliberately overvaluing positions, while Lehman Brothers suspended two senior traders in London as it investigated how they had valued trading positions.

The scandals - and other risk management deficiencies that have come out during the financial crisis - are prompting financial institutions to re-examine their risk management strategies and systems.

"There's a realisation that these rogue trading incidents are becoming more frequent and the losses involved are becoming larger," says Tony Clark, business development director at Detica, a UK-based consultancy.

In August, some of the world's biggest investment banks, including Goldman Sachs, Morgan Stanley and Citigroup, issued a report criticising risk management at their own institutions and urging "serious and sustained investment" in better people and technology.

The SocGen scandal un-earthed a host of risk-management problems. Mr Kerviel - who is under investigation for breach of trust, forgery and unauthorised use of a computer in connection with unhedged transactions - maintains that his superiors knew about his trades, although he admits he forged documents.

SocGen has acknowledged that there were management and risk-control failures, but claims Mr Kerviel concealed his transactions by lying.

Two reports into what went wrong with SocGen's internal controls painted a damning picture of weak procedures, poor implementation and bad management. PwC, which undertook the independent report, said the bank was "slow to react and urgently remediate the most sensitive issues, despite the fact that some of the weaknesses in internal control exploited by the trader had been identified by the general inspection department as an area in need of remediation".

Several institutions have responded to the SocGen scandal. "Companies are increasingly creating fraud or compliance units specifically focused on trader surveillance," says Mr Clark.

Although in recent months, many financial institutions have been focused simply on staying alive, Morgan Stanley is one that has initiated a plan to increase its risk management staff, viewing the turbulence as a historic opportunity to recruit professionals in the field.

Aside from lack of staff, another common problem is that many firms' systems have not kept up with the pace of trading technology. "In the futures sector, there are many ways to access the markets - computer, voice, multiple electronic trading platforms," says Maureen Downs, president of Rosenthal Collins Group, a futures broker. "It's not simply a matter of looking at risk from one access point to the market, but across all markets and execution capabilities."

Sensing these weaknesses, many institutions are introducing new practices. At Ms Downs's company, for example, a new in-house system - RiskHunter - has just been put in place to identify and resolve risks.

The experience of Mr Dooley - whose losses were racked up in electronic trading over a few hours in the early morning - shows how quickly positions can move in volatile markets. That has forced the industry to accept that it is no longer enough to examine positions once or twice a day and to aim for "24-hour risk management" instead.

High-tech responses are crucial, but low-tech ones have their place.

The UK's Financial Services Authority says investment banks could reduce the risk of rogues by encouraging trading staff to take two-week holidays, during which responsibility for valuing their positions would pass to colleagues.

A further problem is the standard of auditing for the derivatives sector, says Mark Holder of Kent State University. "The big problem the auditing firms seem to face is the ability to understand the transactions, at times," Prof Holder argues. "There is a huge lack of good accounting regarding trading and derivatives. The rules are always two steps behind the market. Education of the auditing firms seems to be lacking as well."

Ultimately, however, even the best risk management practices may not stop a rogue trader.

"Someone with fraud on their mind can find ways to get around any system," says Ms Downs.

"And sometimes systems fail, no matter how much you think they can't ... We need to be looking at what can slip through the cracks."