CEBS analyses Kerviel’s op risk impact

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LONDON – The Committee of European Banking Supervisors (CEBS) has published a results summary of its stock-take into banks and supervisors’ reactions to Jerome Kerviel’s $7 billion rogue trading scandal at French bank Société Générale reported in January.

The stock-take was taken with supervisors within the European Economic Area of how Kerviel’s fraud influenced rival banks’ advanced measurement approach implementation for Basel II capital requirements regulation, operational risk practices, governance and internal controls.

Banks emphasised the importance of personnel risk and that the fraud represented a broad failure of internal controls. Banks recommended an appraisal of incentivisation, increased senior management understanding of complex trading, fraud controls, and a risk management focus on extreme profit and loss capable areas of business.

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Investment banks: the future of risk control

This survey report explores the current state of risk controls in investment banks, the challenges of effective engagement across the three lines of defence, and the opportunity to develop a more dynamic approach to first-line risk control

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