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.
Live coverage: OpRisk Europe conference 2015 – Day 2
Highlights from London event
GE Capital's Sabath describes '1.2 line of defence' model
Risk review and challenge belongs on the front line, conference hears
Sound corporate governance at the heart of op risk – French regulator
Thomas Friang sets out vulnerabilities of financial institutions at OpRisk Europe
Longevity risk transfer: Amy Kessler Q&A
Sponsored video: Prudential
Bayesian operational risk models
This paper proposes a methodology to frame risk self-assessment data into suitable prior distributions that can produce posterior distributions from which accurate operational risk measures.
A simple, transparent and rational weighting approach to combining different operational risk data sources
The authors propose a generic weighting function based on a nonparametric approach that can be used to weight the different distributions.
Scaling operational loss data and its systemic risk implications
A scaling methodology to include external data in operational risk calculation is introduced
Hirani, Masters and Wilson apply bitcoin to settlement risk
Derivatives market pioneers co-opt bitcoin tech in bid to transform mainstream markets
Q&A: Business veteran Nesbitt on sharing risk management burden
New head of Canada's risk institute says risk management benefits from multiple actors
Q&A: Standard Life's Singh on changes in risk management
Regulation and tough markets put risk centre-stage, says CRO
Better together: insurers hear case for op risk unity
Firms seeking common ground in the modelling of operational risk
Operational risk scenarios – Bridging the gap between risk quantification and risk management
Sponsored video: Elseware
Risk Books: The Role of Currency in Institutional Portfolios
Momtchil Pojarliev talks about his book, The Role of Currency in Institutional Portolios, currency investing and the potential role of currencies in institutional portfolios.
Photogallery: OpRisk North America 2015
A selection of free-to-view photos from the leading op risk event
Op risk management has tangible benefits, firms claim
Advantages include lower costs and capital
Highlights from OpRisk North America 2015
News from the leading event for op risk professionals
Decline of FoHFs saps due diligence efforts
Investment consultants accused of offering poor substitute to decent research
Operational controls caused Aviva £17.6m fine
Allocation policies and correct oversight the solution
Cyber insurance targets wayward threat – as best it can
Questions over policy design and coverage blight nascent industry
Judgement-led approach to conduct risk capital draws criticism
Proposal by UK banking watchdog receives mixed initial response
Hit the floor: banks fear Basel curbs for capital models
Regulators argue a backstop is needed to avoid too-low modelled numbers