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.

Using transaction data to measure op risk

Since 1999, Peter Hughes has led a team of op risk specialists that has studied transaction processing environments in global banking organisations. The focus was on examining and understanding the causes of operational failure. The information and…

Managing hedge funds' op risks

The focus of this second article on the operational risks associated with hedge funds is the critical need for appropriate operational due diligence.

UK FSA calls off 'Systems and Controls', industry irate

The UK's Financial Services Authority announced at the September meeting of the Operational Risk Standing Group (ORSG) that it would be delaying, until further notice, the implementation of the Prudential Sourcebook text for 'systems and controls'.

US Congressman calls for op risk redraft

A Congressman and members of the banking industry lambasted the operational risk capital charge in Basel II at a fresh set of hearings, The New Basel Accord: Private Sector Perspective, held in the House of Representatives' Financial Services Committee…

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