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.
PNC’s risk chief on life as an in-betweener
Regulatory relief has bypassed the 'super-regionals', says CRO
Operational risk: a forgotten case study
This paper is a historical case study of the GAS scandal and is the first to analyze it from the perspective of operational risk.
Risktech start-ups struggle to clinch big-bank contracts
Light on cash, risk management fintechs face an extended gauntlet most won’t survive
Op risk data: South Africa’s VBS Bank in $100m fraud loss
Top five events also include John Hancock, Deutsche Bank settlements. Plus PPI roundup. Data by ORX News
UBS’s CRO on the hunt for hidden risks
Swiss bank has rung the changes in its attempt to catch hard-to-measure risks, but “you are never safe”, warns Christian Bluhm
Capital add-ons rising for UK banks
Median Pillar 2A requirement across six biggest lenders hits 2.3%
RBS puts RMBS woes behind it, draining capital
DoJ settlement incurs 50bp CET1 ratio charge
Switch to standard model boosts BNP Paribas’ op risk
Operational RWAs grow €6 billion in the second quarter
Lloyds hikes PPI provisions to £550 million
Since 2011 the UK bank has put aside over £19 billion to resolve PPI claims
Credit Suisse scraps legacy businesses at even faster tempo
The firm’s strategic resolution unit shed $6.2 billion of leverage exposure in the three months to June
Dread of cyber attack and data theft grows at EU banks – survey
More than 60% of respondents predict a rise in op risk
Poor governance is top factor in insurer failures – Eiopa
Internal governance and control risks primary cause of 14% of failures
Wells Fargo sheds low risk assets
Bank winds down financial institution deposits to meet Fed order
Op risk data: SocGen suffers twin blow with Libor, Libya losses
French bank takes top two slots in monthly loss data roundup. Plus review of H1 losses. Data by ORX News
Bank boards: goodbye to the prawn sandwich brigade?
Focus on personal liability makes risk committees a more effective challenge, say banks
UK banks ramp up market risk
Market RWAs up £18 billion in first quarter
Quants tout exposure-based approach to op risk modelling
Ebor especially suited to modelling loss events such as legal claims, say proponents
Bank risk committees: desperately seeking risk managers
Most boards still lack career risk specialists despite tighter governance requirements
Ex-CROs lacking on bank risk committees
Only four former CROs are members of committees at 15 large banks, same total as 2012
Has op risk capital peaked for US banks?
Analysts expect steady fall in biggest banks’ $1.4 trillion in RWAs
European banks op risk losses dominated by business failures
Losses relating to accident and neglect account for 38% of op risk losses at eight big dealers
Fraud makes up bulk of UK bank op risk loss events
Internal and external fraud on average equalled 64% of all op risk events in 2017 across four large dealers
Problems remain with op risk standardised approach, say banks
US bill HR4296 could scupper US implementation of SMA, say op risk bankers