Legally blind: Huge settlements overwhelm op risk models

Legally blind


By any standards, a loss of $10.3 billion – the amount Bank of America Merrill Lynch (BAML) agreed to pay Fannie Mae on January 7 to settle mortgage-related claims – is big. But in the world of operational risk – where it belongs, according to bank regulators – it is unprecedented, and that is a problem. According to one consultant who has worked on operational risk measurement with a number of large institutions, the BAML settlement is big enough to wipe out the capital set aside for op risk at

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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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