How extreme losses will affect op risk capital models

Cluster of huge fines calls for changes in models and regulation

Coins frustration
Fat tails you lose: extreme fines are costing banks dear

This year has seen a number of massive fines against large banks, including one of $2.6 billion by the US authorities on Credit Suisse for assisting tax avoidance and another of $8.9 billion against BNP Paribas for sanctions busting.

A report by the London School of Economics (LSE) has identified some $160 billion of 'conduct-related' regulatory fines and litigation settlements from 2008–2012. At the same time, UK banks report that even more reserves are needed to cover the cost of remediation

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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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