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.
Clear, concise, consistent, doable – rules for a risk policy
Effective risk policies may be elusive, but they’re a must, say two veterans of the art
Op risk data: Pandemic paradox of low, low losses
Also: Navient gets schooled for scam; Amex holiday let-down; BNL’s Italian Job hit. Data by ORX News
GFXC sees no changes to code on pre-hedging
Committee rejects calls to set more strict boundaries to controversial practice
Deutsche Börse eyes quantum computing
Pilot application to model enterprise risks cuts computation time from 10 years to 30 minutes
At Canada’s ‘Big Five’, counterparty and op RWAs grew in 2020
Credit, market RWAs ebbed over the year
Op risk managers could be Covid long-haulers
New threats sprang from old sources in this year’s Top 10 op risks, belying a big drop in losses
The importance of getting technology change right
Christoph Kurth, partner and member of the global financial institutions leadership team at Baker McKenzie, covers some of the rapid technological changes under way brought about by, and in the wake of, the Covid-19 pandemic
Top 10 op risks 2021: geopolitical risk
Stimulus unwind, Covid nationalism and regime changes spell volatile operating environment
Top 10 op risks 2021: employee wellbeing
All-encompassing impact of Covid leaves employees with the feeling of ‘living from work’
Top 10 op risks 2021: regulatory risk
Big dip in fines belies lingering fears over Covid loan mis-selling and sanctions risk
Top 10 op risks 2021: organisational change
Change the sole constant as industry ponders its post-Covid future
Top 10 op risks 2021: conduct risk
Remote working vastly complicates the job of conduct risk supervisors
Top 10 op risks 2021: data compromise
Remote working elevates fears of data theft, misuse and abuse
Top 10 op risks 2021: third-party risk
Pandemic and shift to cloud computing inflame concerns for banks and regulators
Top 10 op risks 2021: theft and fraud
Changes in working practices since Covid shift angle of criminal attack on financial institutions
Top 10 operational risks for 2021
The biggest op risks for the year ahead, as chosen by senior industry practitioners
Top 10 op risks 2021: resilience risk
Industry survives biggest real-world stress test, but challenges remain for firms and regulators
Top 10 op risks 2021: IT disruption
Integrity of core systems paramount as risk managers battle outages and hacks in work from home era
Measurement of operational risk regulatory capital in the banking sector: developed countries versus emerging markets
This paper addresses operational risk as a fundamental risk type faced by banks in emerging and developed economies.
Bank supervision: lessons from the post-2008 banking crisis
This paper considers the learning points from official third-party reports produced in the wake of supervisory failures that can be applied to the management of front-line bank supervisors.
Regulatory arbitrage in the use of insurance in the new standardized approach for operational risk capital
Basel’s new standardized approach (SA) for operational risk capital may allow for regulatory arbitrage through the use of insurance. Under the SA, banks will likely have an incentive to insure recurring losses. Such insurance can meaningfully reduce…
Easing of op risk add-on boosts Commonwealth Bank
Op RWA relief offset increases due to credit, market risk
Op risk data: Chronic corruption charges cost Deutsche dear
Also: Wells Fargo fee fight; Nasdaq queers Emir reg; Covid keeps AML fines in line. Data by ORX News
Critical variables in the implementation of a risk-based internal audit: a theoretical and empirical investigation of Greek companies
This paper investigates the critical variables for the implementation of RBIA in Greek companies and examines the relationship between the above variables and RBIA implementation using data collected by 105 internal auditors, external auditors, directors…