Operational risk
WHAT IS THIS? Operational risks are those arising from people, processes and systems – the biggest form of exposure for many industries, but one that was neglected by financial firms until the collapse of Barings Bank in 1995. It was added to the Basel capital framework in 2004, but attempts to model operational risk were dealt a heavy blow by the huge, unforeseen losses suffered by banks in the aftermath of the financial crisis.
Top 10 op risk losses for 2021 hog $15bn total
Despite more fraud and crypto crime, firms’ op risk losses fall in number and in volume. Data by ORX News
Back in the New York groove: BNY CRO’s risk revamp
Veteran risk manager and former trader on “intelligent” risk-taking
UK banks’ RWAs return to growth
Latest Bank of England data shows first increase since Q1, 2020
CCPs unlikely to be wiped out by op losses, research suggests
Former LCH risk chief says sharing loss data would help CCPs avoid risk of holding too little capital, or too much
Op risk data: Mashreq fined $100m for Sudan sanctions busting
Also: Westpac client scams go west; Navient and AFTS schooled over student loan misrule. Data by ORX News
SA extends reach over EU banks’ market and op risk
Regulator-devised models have been capturing a bigger chunk of RWAs through the pandemic
Extreme value theory for operational risk in insurance: a case study
This study aims to test the sufficiency of the solvency capital requirement approach for calculating operational risk using the standard formula as defined in Solvency II.
The role of management accounting practices in operational risk management: the case of Palestinian commercial banks
This paper follows an exploratory, descriptive approach to investigate the role that management accounting practices plays in managing operational risks in the Palestinian commercial banking sector.
Op risk data: Deep woe as deep voice clone cons UAE bank
Also: ING mirrors ABN client loan loss; CS lands huge fine for tuna bonds. Data by ORX News
Commerzbank’s op RWAs rise €1.2bn on SA switch
Transition to new framework under Basel II pushes op risk to two-year high
Fighting Covid-19 in countries and operational risk in banks: similarities in risk management processes
This paper shows how banks managing operational risk and countries tackling Covid-19 could learn from each other to overcome obstacles in effectively mitigating major risks.
Credit Suisse set for op RWA hike as litigation charges pile on
Sfr1bn increase expected to accrue over the next six months
Banks seek greater clarity from regulators on cloud risk
Regulators are reluctant to specify cloud risks, despite warning of overreliance on three big providers
Show, don’t tell, on op resilience – Fed examiner
OpRisk North America: banks warned of “disconnect” between theory and practice
Fed: banks may need AI risk systems to cope with smart devices
Tenfold increase in web-enabled devices via 5G and IoT means explosion in cyber threats, says official
Banks and Fed still stuck on cyber loss data sharing
OpRisk North America: Fed “trying to understand the best way to leverage cyber data”, says Curti
Op risk data: Crypto exchange BitConnect hit with $2bn lawsuit
Also: Legacy €1bn tax liability levied on WestLB ‘bad bank’; ABN and Wells Fargo compensate clients. Data by ORX News
Basel III heralds 41% op risk jump for EU banks
Capital requirements set to rise almost 88% for those G-Sibs that don’t currently use the AMA
Cyber optics: are banks downplaying the SolarWinds hack?
In the wake of the watershed breach, banks eye supply chain risk while talking down the hack’s impact
European banks set for 17.6% capital hike under Basel III
Output floor expected to push Tier 1 capital requirements up 7.3% alone, latest BCBS monitoring report shows
Establishing an effective conduct risk framework
The stakes have never been higher when it comes to conduct risk. Regulators now look to hold senior managers personally liable for the misconduct of their employee populations and, with teams more globally dispersed, managing conduct and culture is more…
Risk Technology Awards 2021
Recognising vendor excellence in credit, operational and enterprise-wide risk management
Op risk data: DeFi-ant crypto hacker steals $610m
Also: Amundi fined for index manipulation; Wells pays out over client fraud. Data by ORX News