Are Operational Risks Rising?
Losses from operational events in the global financial services industry, as reported in the world's press, have grown from $4.4 billion in 1992 to $7.5 billion in 1998 (Figure 1).
The events making up these totals included unauthorized activities, legal liabilities, natural and physical disasters, corporate class action suits and other surprises to earnings.
In this article we examine this apparent growth in operational risk, and discuss whether we can see any pattern over time in the operational
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