In search of clarity and focus

Greater precision is needed in defining operational risk, but the Basle regulators' latest thoughts are lost in generalities, says Jacques Pézier, in the final article of a three-part series.

The Basle Committee should be commended for turning the industry's attention towards the still-relatively-obscure but - with greater information and rapid innovations - increasingly important area of operational risk.

But meeting the criteria proposed by international banking regulators for more effective op risk management and providing the planned operational risk capital charge will create a hefty new burden on the banking industry (see below). Are the costs justified, and will the methods

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