OpRisk Takes Forward Steps at OpRisk Europe 2014

Ariane Chapelle

The OpRisk Europe conference finished on June 12 on a high note for the sector. For the first time, participants heard that operational risk is, at last, a topic in the boardroom, that group heads of operational risk have a say at the top level. The long-awaited credibility of operational risk in the financial industry results in part from a conjunction of negative factors: dramatic crises and losses, gigantic regulatory fines and mounting external threats. But its credibility is arguably also due to more positive reasons: increased professionalism, maturity, and converging practices in operational risk measurement and management.

In such a threatening environment, it is reassuring to see the operational risk management discipline gaining in maturity and in credibility. Duncan Wilson, head of operational risk and internal control at HSBC, told the conference audience about the bank’s risk appetite framework, published in its annual report. Wilson also established five principles for good operational risk management that were referred to by other speakers throughout the conference:

• • Be integral to the way the institution does business
• • Focus on material