FSA risk review head finds lack of attention to op risk from senior managers

Take op risk thinking to the top, urges FSA LONDON – The UK Financial Services Authority (FSA) wants senior managers at financial firms to take operational risk much more seriously than they do at the moment, by incorporating op risk thinking into the highest levels of strategic and tactical decision-making within firms. Rosemary Hilary, head of the risk review department at the regulator, was speaking at the 2006 OpRiskUSA conference in London in early April, when she urged firms to embed oprisk at the highest organisational levels.

Hilary said the FSA had found a few firms that were "effectively dovetailing their various assurance functions". For example, she said, some firms were blending their Sarbanes-Oxley and op risk programmes, and a couple of firms have even brought in "a dedicated, leading edge, total quality management programme".

"However, more often than not, we find operational risk at the periphery of risk management, even though quality of course is a good sign of risk, and a joint effort may be more cost