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.
Risk Technology Awards 2019: Making machines more helpful
Machine learning can be too efficient; now, vendors are looking for ways to make it more accurate. Clive Davidson looks at the stories behind this year’s Risk Technology Awards
Synthetic securitisations and Europe’s capital sweetener
Regulator weighs high-quality label for synthetic deals, but without favourable capital treatment
Goldman Sachs builds legal reserves
Bank raises estimate of potential losses to $2.5 billion
Is there safety in numbers for op risk? One regtech thinks so
Acin’s library of op risks allows banks to compare their controls with their peers’
UK bank RWAs inch up on credit and counterparty risk
Total RWAs stable year-on-year
‘Bad banks’ through the ages
How Deutsche Bank’s latest resolution unit stacks up
Asia-Pacific banks revise conduct scorecards
DBS, Maybank and others tweak performance metrics to reward good behaviour over hard sales
Op risk data: losses decline sharply in first half
Conduct losses account for most of $8.5 billion total. Data by ORX News
Big banks to bear brunt of Basel III reforms in EU
G-Sibs short €82.8 billion of Basel III capital
BoE probes banks on machine learning use
Risk Live: watchdog wants to know “how prevalent” ML models are, say execs
Quantification of operational risk: statistical insights on coherent risk measures
In this paper, the authors review some of the existing methods used to quantify operational risks in the banking and insurance industries.
The operational risk disclosure practices of banks: evidence from India and Romania
This paper compares the levels of operational risk disclosure in the banking industries of India and Romania.
Eurozone G-Sibs’ op RWAs fall €8.1bn in Q1
Deutsche Bank led the charge with €6.4bn reduction
ABA scenario analysis project could aid CCAR comparability
Scheme to agree on common risk drivers could help Fed benchmark risk exposures, says JP op risk expert
Keeping the robots honest
Human overseers are in short supply in an arena where losses can be crippling in minutes
Ex-Huawei tech security chief on steeling UOB’s cyber defences
Singaporean bank overhauls penetration testing and scenario analysis, with Tobias Gondrom leading the effort
Basel set to update op risk and resilience principles
Op risk working group to issue core ‘indicators of resilience’ proposal as update to 2011 principles
Business lines must answer for ML biases – OCC’s Dugan
Banks cannot blame developers or vendors for faulty machine learning models, says regulator
Generali expands scope of internal model
Total SCR drops 8% to €20.4 billion in 2018
Lessons from a decade of top 10 op risks
Constants and changes in Risk.net’s annual rankings spotlight common gaps in op risk management
Financial firms toil to meet new EU rules on outsourcing
Negotiating right to audit vendors, including cloud providers, seen as toughest requirement