# 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.

##### 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…

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 ##### Top 10 operational risks for 2020 ##### 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 ##### ICAAP/ILAAP – Unlocking business value from capital and liquidity assessment Regulators consider banks’ internal capital adequacy and assessment process (ICAAP) and internal liquidity adequacy assessment process (ILAAP) important tools in managing risk. The European Central Bank’s (ECB’s) updated guidance – which came into effect… ##### What do risk disclosures reveal about banking operational risk processes? Content analysis of banks’ risk disclosures in the Visegrad Four countries ##### A growing focus on op risk Operational risk and resilience have taken centre stage over the past year. While op risk concerns all systems and controls that deliver effective solutions against the risks financial services businesses regularly face, Jonathan Peddie, partner at Baker… ##### HSBC to reallocate$100bn of RWAs in shake-up

Global banking and markets division to take brunt of cuts

##### Op RWAs tumble €3bn at Commerzbank in Q4

Op risk capital requirement the lowest for at least nine years

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