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Bon appetit

Now most firms have implemented their operational risk frameworks, forward-thinking institutions are starting to grapple with understanding and setting op risk appetite. But exactly what is it and what benefits does it bring? Victoria Pennington finds out

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Operational risk appetite means many different things to different firms, and in a sense it should do. There is no single defined approach to op risk appetite. It should be unique to an organisation and set pragmatically in conjunction with individual op risk frameworks.

In the broadest sense, setting op risk appetite is about knowing the point at which a firm will become uncomfortable with its level of op risk exposure. "Basically, it is about limit frameworks," says Jonathan Howitt, head of

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