Operational risk
WHAT IS THIS? Operational risks are those arising from people, processes and systems – the biggest form of exposure for many industries, but one that was neglected by financial firms until the collapse of Barings Bank in 1995. It was added to the Basel capital framework in 2004, but attempts to model operational risk were dealt a heavy blow by the huge, unforeseen losses suffered by banks in the aftermath of the financial crisis.
UK investment firms feeling the heat on prudential rules
Signs firms are falling behind FCA’s expectations on wind-down and liquidity risk management
Top 10 op risks: deepfakes drive rise in fraud fears
External fraud re-enters top 10 as artificial intelligence provides new tools for criminals
Top 10 op risks: third parties stoke cyber risk
High-profile hacks on market infrastructures and vendors expose linkage between top three risks
Beware war exclusions in cyber insurance, risk managers told
Risk Live: Experts say policy wording is tightening up following rise in ransomware attacks
Top 10 operational risks for 2024
The biggest op risks for the year ahead, as chosen by senior industry practitioners
Top 10 op risks: AI fears drive cyber risk to record high
External fraud re-enters top 10; change management now a top five concern
Op risk data: Lloyds lurches over £450m motor finance speed bump
Also: JPM trips up on trade surveillance; Reg Best Interest starts to bite. Data by ORX News
LME had four-hour operational failure in Q4
First outage on record caused by connectivity issue at LMEmercury
Too soon to say good riddance to banks’ public enemy number one
As LockBit plans its comeback, experts say banks need a clear ransomware negotiating playbook
Higher revenue pushes HSBC’s op risk up 14%
Increased net interest income over 2023 major driver behind six-year high figure
Semi-nonparametric estimation of operational risk capital with extreme loss events
The authors put forward a means to estimate value-at-risk capital during extreme loss events which combines SNP estimation with EVT-POT theory.
Beating the drum on cyber risk: the battle for boardroom attention
Delays patching financial sector vulnerabilities highlight the need for more internal clout for cyber chiefs
Estimating the probability of insurance recovery in operational risk
The authors put forward a novel methodology for the estimation of probability of insurance recovery.
Why cyber hack leaves EquiLend down but not out
Users turned to alternative securities lending platforms, but that may not mean lost market share
Op risk data: Morgan Stanley clocked in block trading shock
Also: HSBC deposit guarantee gaffe; Caixa hack cracked; reg fine insult to cyber crime injury. Data by ORX News
ING’s op risk jumps 10% on model updates
Other European AMA users report moderate hikes
Europe’s new AI Act threatens supervisory ‘chaos’ for banks
Policy-maker says new role for European Commission could collide with ECB model risk regulation
RBI’s op risk charges climb 22% on input-series update
Recalibration reverses savings from discontinuation of AMA a year earlier
Citrix Bleed hacks flag IT asset inventory shortfalls
To know what needs urgent patching, global banks first need to know what software they have
Tall order: why a unified op risk taxonomy is still elusive
Banks vary in how they classify operational risk losses – and regulators are in no rush to change the status quo
EquiLend cyber hack exposes trade reporting dependence
Ransomware attack at securities lending platform disrupts regulatory compliance