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.
How geopolitical risk turned into a systemic stress test
Conflict over resources is reshaping markets in a way that goes beyond occasional risk premia
Banks split over AI risk management
Model teams hold the reins, but some argue AI is an enterprise risk
New EBA taxonomy could help integrate emerging op risks
Extra loss flags will allow banks to track transversal risks like geopolitics and AI, say experts
Improving data for managing cyber risk and building resilience
The authors investigate current and proposed cyber risk reporting requirement and describe the data gaps that remain before discussing how a better and harmonized cyber incident data collection rule could improve cybersecurity.
Operational risk patterns in New Zealand banking: a clinical case study
The authors analyze more than 5000 operational risk incidents from a major New Zealand bank to document risk patterns within a concentrated, dual-regulated banking environment, showing human factors to have accounted for over half of the recorded…
Risk managers question US reach of Dora third-party list
Some EU subsidiaries included, but regulator control over cloud providers could still be limited
Could one-off loan losses at US regional banks become systemic?
Investors bet Zions, Western Alliance are isolated problems, but credit risk managers are nervous
Op risk data: Low latency, high cost for NSE
Also: Brahmbhatt fraud hits BlackRock, JP Morgan slow to shop dubious deals. Data by ORX News
EU single portal faces battle to unify cyber incident reporting
Digital omnibus package accused of lacking ambition to truly streamline notification requirements
How Basel III endgame will reshape banks’ business mix
B3E will affect portfolio focus and client strategy, says capital risk strategist
Chicago data centre outage forced clearers to turn away clients
Friday’s cooling system failure highlights cracks in tech and concentration risk of big CCPs
Op risk data: Ghost of Madoff still haunts HSBC
Also: Giant loan frauds hit three global banks, and AWS outage casts a cloud. Data by ORX News
Treasury market urged to beef up operational resilience plans
NY Fed panel warns about impact of AI and reliance on critical third parties
Determining the perception of operational risk management practices based on demographic factors in the South African banking sector
The authors present and analyse a survey of various demographic groups and their perception and understanding of risk management in South African banks.
Breaking silos: agile insurance in an uncertain world
Insurers are realigning strategy and operations in the face of growing uncertainty and more complex risk
How has the anti-corruption campaign affected operational efficiency? Evidence from a quasi-natural experiment in China
The authors analyze how China's anti-corruption campaign impacted operational efficiency, and offer suggestions for policymakers in emerging economies hoping to improve corporate performance through institutional reforms.
Has the Collins Amendment reached its endgame?
Scott Bessent wants to end the dual capital stack. How that would work in practice remains unclear
How conflict sharpened Israel’s role in cyber security
Recent growth in offshoring of infosec comes despite regulatory focus on supply-chain resilience
Global banks ‘hassled’ by China’s mystery data rules
Some firms left in the dark as new guidance on exporting data overseas is distributed bilaterally
How FCA could help tackle third-party risk in AI
UK regulator’s supercharged sandbox is designed to boost explainability and reduce reliance on vendors
Op risk data: For Yes Bank, no mercy over insider fraud
Also: Cracking Brazil’s Pix hacks, Macquarie fund fumble, and taxing time for Crédit Agricole. Data by ORX News