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 the Fed’s asset cap changed Wells Fargo
Lender has expanded repo book and cut cash since Q4 2017
LCH suffered longest operational outages of top CCPs in 2019
London-based LCH LTD said core systems were down for almost seven hours in 2019
Covid-19 frazzles AI fraud systems
Seismic changes in customer behaviour see machine learning solutions throw out false positives
Op risk data: outsourcing losses loom in lockdown
Also: Swedbank hit with huge AML fine; record Russia fine for StanChart. Data by ORX News
Incremental value-at-risk
This paper proposes a novel method for estimating future operational risk capital: incremental value-at-risk (IVaR)
Coronavirus is testing op risk managers to the limit
No amount of stress testing can prepare firms for the risks they’re facing, says Ariane Chapelle
Operational uncertainty – An unavoidable challenge
The transition from Libor to a new risk-free rate has revealed a number of challenges for all financial markets participants – the nature and scope of what lies ahead is vast, impacting businesses, operations and support functions. KPMG‘s global Libor…
Op risk data: BNP faces €150m bill from mortgage loan sales
Also: Maybank, ING and MUFG hit by $300m commodities trading fraud. Data from ORX News
SOFR drought, CB accounts for CCPs, and the Top 10 Op Risks
The week on Risk.net, February 29–March 6, 2020
Top 10 operational risks for 2020
The biggest op risks for 2020, as chosen by industry practitioners
Top 10 op risks 2020: regulatory risk
New technology and reams of red tape make non-compliance fines more likely
Top 10 op risks 2020: IT disruption
Risk of downed systems, from hack or outage, continues to make op risk managers fret
Top 10 op risks 2020: data compromise
Hackers, thieves and wobbly in-house data management keep this category near the top of the list
Top 10 op risks 2020: geopolitical risk
Nationalism, trade wars and epidemics make for a heady cocktail
Top 10 op risks 2020: theft and fraud
From mega loan fraud to canteen theft, the danger is ever present
Top 10 op risks 2020: talent risk
Firms struggle to reduce headcount and fill gaps without cutting corners
Top 10 op risks 2020: conduct risk
Root-and-branch reform of bank culture remains a work in progress
Top 10 op risks 2020: organisational change
New tech has created perennial state of flux in banking, as other kinds of shake-ups continue
Top 10 op risks 2020: resilience risk
In an entwined financial system, an outage at one bank can reverberate through many more
Top 10 op risks 2020: outsourcing and third-party risk
Respondents worry about risks stemming from an opaque web of vendors with poor controls
IT disruption chief concern in Top 10 Op Risks survey 2020
Risk managers cite data compromise, theft & fraud and third-party risk among other top worries
Adapting to technological change in op risk management
Baker McKenzie‘s Jonathan Peddie explains how the role of operational risk manager has evolved in recent years, how financial firms are managing increasing demand for data privacy and transparency, and how technological advancements over the coming…
BNY Mellon nabs Hallinan for enterprise risk role
Hiring of former Credit Suisse op risk head follows last year’s appointment of Senthil Kumar as CRO