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.
Compliance can help fintechs grow from adolescence to adulthood
It may slow US banking down, but customer safety is the difference between success and failure
Op risk data: Frank fiasco costs JP Morgan $175m
Also: Internal fraud burns fewer fingers, but flame is far from out. Data by ORX News
The information value of past losses in operational risk
The authors argue that past operational losses inform future losses at banks and that the information provided by past losses results from their capturing factors that are hard to quantify in other tests.
The case for modularity and interoperability
This report, produced by WatersTechnology and Broadridge, investigates the extent to which firms have optimized their entire trade lifecycles, the structure, challenges and interoperability of their front-office systems, and what they most value when…
Application of the radial basis function in solving an operational risk management model: investigating the probability of bank survival with risk reserves
The authors investigate the probability of bank survival in relation to operational risk and risk reserve and calculate the amount of risk storage necessary to achieve the desired probability of survival.
Does board diversity mitigate firm risk-taking? Empirical evidence from China
The authors explore the relationship between firm risk and both demographic and cognitive-oriented board diversity.
Basel climate guidance leaves op risk managers in the dark
Banks still unclear on how to fit climate events into existing capital framework
In a downturn, mitigation beats litigation every time
Economic shocks increase op risks for banks, but institutions can take steps to limit the danger
Mizuho fined over deal contingent FX forwards
CFTC finds clients weren't told about pre-hedging activity that likely resulted in worse pricing
Integrating ECL onto a stress-testing platform: portfolio composition
How to grow a portfolio that is internally consistent with a stress scenario
FRTB implementation: Spotlight 2023
The Fundamental Review of the Trading Book (FRTB) introduces significant technical and operational challenges for banks on the path to compliance.
Legacy legal costs could stretch state support for UBS
Downside protection of Sfr9 billion must cover numerous outstanding claims against Credit Suisse
Op risk data: Wells Fargo whacked for Wachovia lapse, and a Ponzi slap
Also: Long and winding road to the end of Credit Suisse; Swedbank IT fails. Data by ORX News
Fed preps new white paper on cyber incident reporting
New proposals due on data capture after Fed dumps bid to use DFAST submissions
Hurdles to cross-border data sharing impede AML fight
Expansion of national initiatives hampered by data-privacy and information-security fears
Rethinking surveillance: a focus on risk and data centralisation
Effective surveillance continues to be a big concern for firms worldwide, for which they need to stay ahead by making systems both predictive and preventative, with a focus on data centralisation. Lee Garf, general manager, compliance at NICE Actimize,…
Leaders’ panel: risk culture 2.0: redefining attitudes and behaviours in an era of change
Amid an increasingly complex risk landscape, regulators’ expectations around culture and conduct have become more stringent.
ESG strategies special report
This Risk.net special report sponsored by SAS features a series of articles that reflect on the latest initiatives for consistent standardised global frameworks for measuring ESG, consider the methodologies investors are using to make measurable progress…
SEC cyber rules risk creating web of confusion and costs
Proposals would require breach notifications, public disclosures and annual cyber assessments
Top 10 operational risks: Focus on regulatory risk
Tougher regulatory enforcement, new consumer rules and rise of ESG are ringing alarm bells
Ion wasn’t deemed a ‘critical’ vendor by most clients
Software firm escaped heavy scrutiny ahead of cyber attack, says US Treasury official
Integrating ECL onto a stress-testing platform: credit risk characteristics
How credit loss in the ECL process can leverage changes in the credit risk profile of a portfolio during a stress scenario
Op risk data: Stanford fraud haunts banks for billions
Also: Helaba’s crank capital relief; TSE stock price sanction; 1MDB mauls Mudabala. Data by ORX News
Digital exposure makes fraud management a vital responsibility for financial institutions
Fraud management and detection continue to be an increasing area of concern for financial institutions worldwide