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.
Legal charges topped £6 billion at UK banks in 2018
Majority of costs relate to legacy issues, including PPI and RMBS mis-selling
FCA steps up anti-money laundering spot checks
UK watchdog changes fincrime head amid speculation AML spot visits increasing because of critical FATF review
Op risk capital to jump 45% for European banks under Basel III
Some banks could see capital increases of more than 60%
Op risk capital: looking back in anger
Top 10 op risks survey shows industry has sights set on the horizon, even when regulators are looking backwards
Top 10 op risks 2019: theft and fraud
Rogue employees are costly, but the thought of cyber mayhem dominates managers’ concerns
Top 10 op risks 2019: outsourcing and third-party risk
Perfecting internal controls is meaningless when lax oversight of outsourcing offers back-door vulnerability
Top 10 operational risks for 2019
The biggest op risks for 2019, as chosen by industry practitioners
Top 10 op risks 2019: Brexit
UK departure from European Union could result in “every operational risk you’ve ever seen”
Top 10 op risks 2019: regulatory risk
Money laundering and threats to personal data have regulators spooked
Top 10 op risks 2019: organisational change
Missteps during strategic change open up a grab bag of different risks
Top 10 op risks 2019: IT failure
Worries amplified by conspicuous mishaps and regulators’ new focus on operational resilience
Top 10 op risks 2019: IT disruption
Cyber attacks present multi-faceted threat, but banks and regulators are fighting back
Top 10 op risks 2019: data compromise
Big data provides big target for hackers, as banks wrestle with risk of monetary and reputational loss
Top 10 op risks 2019: mis-selling
Concern over sales practices remains amid economic and political uncertainties
Top 10 op risks 2019: data management
GDPR fuels fears of mega-fines for data-handling missteps
One-third of US G-Sib capital due to op risk
Op risk share of total RWAs has increased over three years
Data theft leads top 10 op risks survey for 2019
Fears of data breaches eclipse concerns over disabling cyber attack; IT failure and Brexit enter top 10
PRA's Pillar 2 add-ons reflect mixed verdict on UK banks
Median CET1 Pillar 2A charge for big six banks rises to 2.25%
Op risk data: losses focus attention on bank resilience
Also: StanChart’s control fail fines, plus three losses in Russia. Data by ORX News
An alternative approach for the operational risk assessment of a new product
The aim of this paper is to provide a new operational risk management framework to identify and mitigate the operational risk exposure arising from a new product.
Execution issues dominate UK bank op risk losses
This category of risk accounted for 47% of op risk losses on average at five banks
Op RWAs surge at Wells Fargo, dwindle at other G-Sibs
Higher capital charges a knock-on effect of a slew of misconduct scandals
Machine learning enters battle against financial crime
Standard Chartered and Barclays using AI to detect money laundering violations
End of an era: Credit Suisse dissolves resolution unit
The Swiss bank’s SRU reduced its total leverage exposure in 2018 to $30 billion – below the bank’s end-year target of $40 billion