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.

Laundering goes virtual

Multiplayer sites such as Second Life might have started out as a bit of innocent fun, but the potential for criminals to use them for underhand financial means demands serious consideration

Spanish sensibility

BBVA's global head of operational risk, Jordi Garcia, takes a pragmatic, hands-on approach to managing the Spanish bank's op risk. Duncan Wood talks to this veteran of the industry about the unique quality of Spanish loss data, Basel II and life at the…

The Feds are coming

Regulators in the US are cracking down on banks in their stringent anti-money laundering campaign. Nick Kochan looks at the civil penalties being imposed on financial institutions and wonders whether they are entirely justified

Look to risk management

With regulators' showing no mercy for non-compliant firms, now is the time to strengthen risk management and compliance departments

The rotten core

The US is now closely examining the root causes of the subprime crisis, including mis-selling, fraud, poor internal controls and perverse incentive schemes. David Benyon explores these issues, and some potential solutions

Rethinking (operational) risk management

For operational risk managers to really make a difference to their firms' fortunes, they must be willing to get their hands dirty and face facts, no matter how scary the facts may be, says Sergio Scandizzo, in the second of a two-part series

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