FiXing op risk

In a post-Rusnak era, operational risk management is a high priority. Could the Financial Information eXchange messaging standard provide a safety net?

Foreign exchange dealers are understandably nervous about discussing operational risk controls, given the withering press coverage of John Rusnak’s record $700 million forex fraud at Allfirst Financial, uncovered last year. But European and US central banks and regulators, realising the potential threat of lax operational risk management, are set to devote much of 2003 to exploring the issue, developing best-practice standards for a variety of front- and back-office operational processes.

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