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.
Show don’t tell: BoE’s climate stress test dilemma
Making the test easier to run could come at the expense of building risk management capacity
At UBS, asset cull drives down RWAs
Final quarter of 2019 saw risk-weighted assets fall $5.4 billion
Op risk data: Regulator fines tumble by $5bn in 2019
Also: Julius Baer hit with $150m Cold War-era claim, Barclays pays $87m for bond rigging. Data by ORX News
Legal woes dent Wells Fargo’s earnings
Of total operational losses in Q4, legal costs accounted for 79%
Cyber risk tops EBA poll of operational risks
Bank analysts say money laundering, conduct and legal risk are pressing challenges, too
Top 10 operational risk losses of 2019
Fraud, embezzlement, tax evasion, subprime (still) and rogue trading – and Citi crops up twice. Data by ORX News
Op risk modelling limited to largest EU banks
Smallest banks do not use AMA at all
Five eurozone G-Sibs cut op RWAs in Q3
Deutsche Bank cut €5.7 billion quarter on quarter
Germany scrambles to shut the door on Mifid open access
Finance ministry will face fine timing to reverse clearing rule during its EU presidency
Op risk data: Brazil bank faces near-$1bn tax probe fine
Also: UBS hit for $77m for spread hikes; PPI costs top £50bn. Data by ORX News
Bank risk manager of the year: HSBC
Risk Awards 2020: New market risk system proves its worth in a year of emerging market blow-ups
UK regulator issues plans for bank ops resilience
Bank of England to publish formal policy for recovering from disasters in 2020
NY Fed’s Stiroh: ‘More work to be done’ on bank culture
Supervision chief warns on new risks from machine learning bias
The problem with GRC
Boards may care more about products and profits than governance, risk and compliance (GRC). But without an effective GRC programme, the fun soon stops when trouble calls, says Michael Gibbs, chief executive of SureStep Risk + Analytics
Clearing house power-downs raise fears among members
Banks question CCP resilience to system outages, as debate swirls over non-default losses
Industry-led op risk taxonomy launches
Scheme aims to complement Basel classifications, ease peer comparison
Buy-side risk manager of the year: Vanguard
Risk Awards 2020: Fund giant gave more risk work to machines this year - from duration hedging to op risk
Industry to take up Fed’s white paper on cyber risk
Workshop will delve into definitions and classifications of the most chameleon of risks
Robo-raters help banks vet vendors for cyber risk
Specialists tout service for monitoring third parties amid tougher rules on outsourcing risk
Swiss banks ask, how about a magic trick?
Banks pull off an accounting trick – with the help of their regulator
Op risk data: $250m legacy loan frauds hit Bric banks
Also: costs from post-2012 cyber breaches top $2bn. Data by ORX News
FBI sees steep rise in state-sponsored cyber theft
Risk USA: Impact of US sanctions driving theft “to fund coffers”, says special agent
Wells Fargo op risk charge jumps $3.6bn in Q3
San Francisco-based lender still bound by standardised capital approach