Journal of Operational Risk
ISSN:
1755-2710 (online)
Editor-in-chief: Marcelo Cruz
About this journal
Of the main areas of risk management, operational risk has the shortest history, with the industry beginning to give it serious consideration only 25 years ago. In that time, the industry has made great strides in both the definition and quantification of operational risk. The Journal of Operational Risk has been publishing papers at the forefront of this development since its inception.
On the quantification side, significant progress has been made, with major banks disclosing their operational risk exposures on a yearly basis. For many financial institutions their operational risk exposure is higher than that of market and credit risks. One large operational risk event can be lethal to a financial firm. Operational risk is thus a key concern for the industry as well as for the regulators that supervise financial institutions.
On the definition side, the industry has recently introduced the concept of “Non-Financial Risk” encompassing not just the early definition of operational risk but other risks like strategic, people, cyber, IT, etc. A broader view of operational risk would also consider Enterprise Risk Management, Cyber Risk Management, Information Technology Risks, Data Quality Risks amongst others. The introduction of new technologies like machine learning, artificial intelligence alongside new quantification ideas makes operational risk an intriguing risk domain with a green field for development and implementation of new ideas and theories.
With that in mind, The Journal of Operational Risk welcomes papers on non-financial risks as well as topics including, but not limited to, the following.
- The modeling and management of operational risk;
- Recent advances in techniques used to model operational risk, e.g., copulas, correlation, aggregate loss distributions, Bayesian methods and extreme value theory;
- The pricing and hedging of operational risk and/or any risk transfer techniques;
- Data modeling external loss data, business control factors and scenario analysis;
- Models used to aggregate different types of data;
- Causal models that link key risk indicators and macroeconomic factors to operational losses;
- Regulatory issues, such as Basel II or any other local regulatory issue;
- Enterprise risk management;
- Cyber risk management;
- IT risk management (how systems errors/fails impact an organization and change their risk profile);
- Big data applications to non-financial risk;
- Artificial intelligence and machine learning applications to risk management;
- Qualitative analysis of non-financial risks.
Journal Metrics:
Journal Impact Factor: 0.8
5-Year Impact Factor: 0.7
CiteScore: 1.3
Latest papers
The economic cost of a fat finger mistake: a comparative case study from Samsung Securities’s ghost stock blunder
This paper quantifies the economic cost of Samsung Securities’s ghost stock blunder using the synthetic control method.
The impact of culture upon operational risk management guidelines in the banking sector of selected Asian countries
The central banks of different countries regulate ORM according to the specificities of their national banking industry. This paper tests the hypothesis that such regulatory openness results in legal texts that are highly influenced by the culture of the…
Measurement of operational risk regulatory capital in the banking sector: developed countries versus emerging markets
This paper addresses operational risk as a fundamental risk type faced by banks in emerging and developed economies.
Bank supervision: lessons from the post-2008 banking crisis
This paper considers the learning points from official third-party reports produced in the wake of supervisory failures that can be applied to the management of front-line bank supervisors.
Regulatory arbitrage in the use of insurance in the new standardized approach for operational risk capital
Basel’s new standardized approach (SA) for operational risk capital may allow for regulatory arbitrage through the use of insurance. Under the SA, banks will likely have an incentive to insure recurring losses. Such insurance can meaningfully reduce…
Critical variables in the implementation of a risk-based internal audit: a theoretical and empirical investigation of Greek companies
This paper investigates the critical variables for the implementation of RBIA in Greek companies and examines the relationship between the above variables and RBIA implementation using data collected by 105 internal auditors, external auditors, directors…
The spillover effect of the Bangladesh Bank cyber heist on banks’ cyber risk disclosures in Bangladesh
This study examines the spillover effect of that cyber heist on the cyber risk disclosures of the banking sector in Bangladesh.
Detection of financial fraud risk: implications for financial stability
This introduction to the Journal of Operational Risk special issue shines a light on the relationship between financial fraud risks and financial stability.
The strange case of the Jet Airways bankruptcy: a financial structure analysis
The authors investigate the financial structure of Jet Airways, with the aim of understanding whether financial turbulence for an airline company can constitute an antecedent for predicting the risk of bankruptcy.
Ten laws of operational risk
This paper sets out ten laws that govern the behavior of operational risk relating to the occurrence and detection/duration of events; the rapidity with which firms suffer losses; the lags in crystallization of losses; and internal and external drivers…
Quantification of regulatory capital for management of operational risk in banks: study from an emerging market economy
This paper studies the various methodologies used by an Indian bank in its operational risk management activities: these include loss database analysis, risk control self-assessment and key risk indicator (KRI) identification.
Evaluating cyclic risk propagation through an organization
Many large organizations have risk that propagates because of the dependencies between their various major organizational components. This paper addresses when cycles of dependencies exist in an organization or system of systems.
Does the source of information influence depositors’ withdrawal intentions during operational events?
The objective of this paper is to identify whether depositors’ intentions to withdraw funds during operational risk events differ based on the source of information.
Benchmarking operational risk stress testing models
This paper outlines several approaches to benchmarking operational loss projections under stressed scenarios using both accounting metrics and historical loss experience.
What is essential is invisible to the eye: prioritizing near misses to prevent future disasters
Near misses represent a primary information source to analyze the operational risk exposure of a company, since they can reveal gaps in the control environment. The model proposed in this paper aims at identifying the most dangerous events that could…
Strategic and technology risks: the case of Co-operative Bank
This paper studies the growth by acquisition strategy embarked upon by a mid-sized UK bank, the Co-operative Bank; this strategy was a disaster, leaving a heretofore successful bank in dire trouble and on the block for buyers at a substantial discount to…
An emergent taxonomy for operational risk: capturing the wisdom of crowds
In this paper, the author takes a data-driven approach and combines the individual active taxonomies of sixty large financial institutions (fifty-eight for construction and two for validation) to create a coherent new reference taxonomy: the ORX…
What do risk disclosures reveal about banking operational risk processes? Content analysis of banks’ risk disclosures in the Visegrad Four countries
Risk capital reserve and measurement precision in modeling heavy-tailed single operational losses
This paper provides a rationale for adopting quantitative buffer capital, designed to absorb variations due to measurement errors, especially those originating from the estimation risk.
Difference between the determinants of operational risk reporting in Islamic and conventional banks: evidence from Saudi Arabia
In this study, the author investigates the operational risk reporting practices of Islamic banking institutions (IBIs) and conventional banks (CBs) in Saudi Arabia. Moreover, the author explores the joint effect of banking characteristics, corporate…
