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.
Best GRC product: MetricStream
MetricStream benefits from exclusive focus on governance, risk and compliance
Regulator of the year: Financial Action Task Force
FATF promotes risk-based approach in response to worries about 'de-risking'
Best financial crime product: Swift
Swift offers firms assistance in avoiding entities and individuals hit by sanctions
Best managed/support services provider: Thomson Reuters Org ID
Thomson Reuters managed service eases burden of know-your-customer rules
Consultancy of the year: EY
Consultancy firm offers joined-up approach to ERM and operational risk issues
Paper of the year: JD Opdyke
New technique may help limit errors in AMA capital estimates
Potential for catastrophe lurks in complex systems
Human failings can subvert well-intentioned efforts to avoid disaster
Reining in capital models is bad for risk management
AMA's likely demise is latest sign of worrying trend in bank capital rules
Outsourcing risk: a separate operational risk category?
This paper identifies three steps in sourcing risk.
Truncated lognormals as a power-law mimic in operational risk
This paper makes use of the power-law mimicry properties of the truncated lognormal distribution and shows how they fit operational risk data considerably well.
A weighted likelihood estimator for operational risk data: improving the accuracy of capital estimates by robustifying maximum likelihood estimates
This paper proposes the use of a robust generalization of MLEs for the modeling of operational loss data.
Mitigating rogue-trading behavior by means of appropriate, effective operational risk management
This paper discusses the violation of applicable firm guidelines by individuals employed by a bank or financial institution and suggests specific metrics to identify and prevent such behaviour.
How cultural 'bleed' across banks could reinforce op risks
Common cultural practices may span the divides between financial institutions – promoting common operational risks
Op risk's role in change management is crucial – MUFG
Managers should be more confident challenging new processes
Sovereign wealth fund interns cost BNY Mellon nearly $15m
Custodians should retrain HR in foreign bribery rules as SEC threatens further action
Business continuity tops the risk list for Options Clearing Corp
CRO explains how disasters have shaped his priorities
Change to broken benchmarks ‘years away’
No significant benchmark reforms likely until regulators take the lead
Zurich Asia CEO calls for greater focus on cyber risk
Complacency still prevalent among companies in Asia
Managing data still biggest technology challenge for Asia banks
Data has been a problem for the past two decades for firms in the region
Monitoring IT operational risks across US capital markets
This paper suggests an approach for assessing IT risk through an incident-based method for monitoring operational IT risk across an extended enterprise based on the ISACA Risk IT framework.
Santander op risk head aims to "get off bottom rung" after CCAR fail
Bank fell short this year on qualitative op risk governance issues
Highlights from OpRisk Europe conference 2015
Exclusive coverage of London event
HSBC op risk team "were not delivering full value", Cooke says
Overhaul focused on simplifying op risk management
Business side must be challenged on risk reports, conference hears
Frontline business may avoid addressing major risks