Commonwealth Bank of Australia has promised to remediate its floundering risk management systems following the release of a damning review of its governance and accountability record by an inquiry commissioned by APRA.The country's largest bank will implement all 35 recommendations of John Laker's inquiry into risk management at the company amid calls from Treasurer Scott Morrison that more senior executive heads should roll.The Laker panel, which comprised former ACCC chairman Graeme Samuel and businesswoman Jillian Broadbent, found that the accident-prone bank's financial success had dulled the risk management senses of the institution's leaders."This dulling has been particularly apparent, at least until recently, in CBA's management of its non-financial risks (that is, its operational, compliance and conduct risks)," the inquiry concluded."These risks were neither clearly understood nor owned, the frameworks for managing them were cumbersome and incomplete, and senior leadership was slow to recognise, and address, emerging threats to CBA's reputation."The consequences of this slowness were not grasped."CBA's long list of risk management failures include a string of financial advice scandals, mis-selling of margin loans, anti-money laundering breaches, deficient life insurance coverage and the inappropriate marketing of credit card insurance.The panel found that when each of these failures was considered together "they indicate shortcomings in the way CBA managed its risks and compliance obligations".The inquiry has made 35 recommendations that include more rigorous governance of operational and compliance risk management by directors and senior executives of the company.The proposed changes, which the bank has pledged to implement under an enforceable undertaking to APRA, also include measures that would upgrade the authority of risk managers and compliance executives employed at the bank.CBA will not incur a financial penalty for failing to meet its obligations, despite being an "advanced" accredited bank under APRA's framework for regulating operational risk.APRA granted CBA and the other major banks advanced accreditation a decade ago after they each passed the highest regulatory tests for managing operational perils such as staff misconduct.The special recognition conferred on CBA meant that it won capital discounts from the regulator while smaller but more stable institutions such as credit unions attracted higher regulatory capital charges.CBA's share price rallied strongly after APRA chairman Wayne Byres announced that the bank would only incur a A$1 billion "add-on" to its capital requirements that will be unwound when it implements the conditions of the enforceable undertaking."CBA has given to APRA an enforceable undertaking which establishes a framework by which CBA will demonstrate it is addressing the full set of recommendations made by the panel in a timely manner," Byres said."Until such times as these recommendations are addressed to APRA's satisfaction, an add-on to CBA's operational risk capital requirement will continue to apply."CLSA banking analyst Brian Johnson said the regulatory capital mark-up was comparatively light."National Australia Bank copped a capital add-on of 100 basis points for its trading room scandal 15 years ago, but the CBA add-on equates to only 29 basis points," he said.Investors poured into CBA scrip driving the share price up by $1.35 to $73.17.CBA