Tricks Of The Trade - Bayesian Belief Networks
PRACTITIONER ANALYSIS
Bayesian belief networks offer a powerful new tool with which to analyse and quantify op risk, says researcher Brendon Young.
Op risk practitioners at banks are currently showing great interest in the use of Bayesian Belief Networks (BBNs).
The approach has yet to be tested in the financial industry, but it seems to offer a straightforward and intuitive method of quantifying op risk.
Indeed, practitioners who are learning about the technique say that it seems to formalise in a useful way many of
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