Trust is critical for operational risk loss databases

Getting loss data consortiums to work may require high levels of trust – or intervention from regulators. In a shorter version of their research paper to be published later this month, Hubert Kiss and Daniel Homolya discuss the best ways to motivate data-sharing

Operational risk data-sharing works well in many developed countries, so why don't we see operational risk data consortiums all over the world? The answer lies in trust. In the countries where we do not see such data-sharing arrangements there may be different aspects of trust deficiency. Our game theory-based analysis, just published in the Journal of Operational Risk, shows that sufficient incentives, based on adequate controls and supervision, and a more stable economic environment, lead to