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.
SGX suffered five-hour op failure from CrowdStrike outage
First major service disruption at CCP’s Central Depository service in nine years
On resilience risk, banks prepare to let the bad times roll
Lenders bolster first-line teams and upskill boards as compliance with new rules bites
The path to operational resilience begins with reliability and risk management
The challenges Apac financial services firms face enhancing operational resilience and leveraging data and hybrid cloud
FX automation key to post-T+1 success, say custodians
Custody banks saw uptick in demand for automated FX execution to tackle T+1 challenges
For banks, change risk is inevitable; managing it, optional
Regional bank survey shows steady growth of dedicated change risk functions and adoption of leading indicators
Review of 2024: as markets took a breather, firms switched focus
In the absence of major crises and rules deadlines, financial firms revamped strategy, services and practices
As supplier risk grows, banks check their third-party guest lists
Dora forces rethink of KRI and appetite frameworks amid reappraisal of what constitutes a key counterparty
Dora flood pitches banks against vendors
Firms ask vendors for late addendums sometimes unrelated to resiliency, requiring renegotiation
Op risk data: Santander in car crash of motor-finance fail
Also: Macquarie fined for fake metals trade flaws, Metro makes AML misses, and Invesco red-faced over greenwashing. Data by ORX News
Public enemy number one: the threat to information security
Nearly half of domestic and regional banks report risk appetite breaches amid heightened sense of insecurity
Op Risk Benchmarking 2024: the banks
As threats grow and regulators bore down, focus shifts to the first line
Fed stress-testing operational readiness of discount window
Experts say consultation on improved ops should be accompanied by focus on willingness to borrow
CFTC weighs third-party risk rules for CCPs
Clearing houses could be required to formally identify and monitor critical vendors
Elevating risk management to a strategic partner in investment decision-making
Based on insights from a Risk.net webinar sponsored by S&P Global Market Intelligence, this article explores how risk management is evolving from a compliance role to a strategic partner.
New CME guidance to drive tighter margin call management
Clearing house rule clarified to limit the use of grace periods to cases of admin/operational errors only
Too ’Berg to fail? What October’s Instant Bloomberg outage means for the industry
The ubiquitous communications platform is vital for traders around the globe, especially in fixed income and exotic derivatives. When it fails, the disruption can be great
Japanese G-Sibs see 9% surge in op risk charges
Rising profits drive record RWA growth under new Basel framework
Op risk data: At Trafigura, a $1bn miss in Mongolia
Also: Insurance cartels, Santander settlement and TSB’s “woeful” customer treatment. Data by ORX News
Cyber risk can be modelled like credit risk, says Richmond Fed
US supervisors may begin to use historical datasets to assess risk at banks and system-wide
Basel III slashes $78bn in RWAs from top Singapore banks
Credit and operational risk recalibrations fuel double-digit falls at DBS, OCBC and UOB
Unraveling Lebanon’s financial crisis: the path from promise to peril, delving into a risk strategist’s own experience
The author investigates the causes of Lebanon's financial crisis which began in 2019 and puts forward suggestions with which to restore trust and stability.
Consolidation of Arval exposures adds €20bn to BNP Paribas’ RWAs
Bank shifts exposures from soon-to-be retired equity IRB treatment to standardised approach
Foreign banks want level playing field in US Basel III redraft
IHCs say capital charges for op risk and inter-affiliate trades out of line with US-based peers
Artificial intelligence in crisis management: a bibliometric analysis
The authors carry out a bibliometric analysis of academic papers in the field of artificial intelligence applications in crisis management and propose potential new directions for researchers in this field.