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.
Citi, BNY Mellon escape Collins floor
Both banks return above the threshold after just two quarters
Op risk data: SEC says no to Charles Schwab robo-adviser
Also: China steps up scrutiny of wealth management products; Libor fines still rumble on. Data by ORX News
How climate change may impact operational risk
This paper uses the ten laws of operational risk along with taxonomies for inadequacies or failures and their impacts, and it also draws parallels with past crises, in order to make systematic predictions.
Concentration risk add-ons too low at Ice and ECC, says regulator
Results of European stress test suggest shortfall of collateral for large commodities positions is equivalent to 17% of total required margin
Finding the investment management ‘one analytics view’
This report is essential reading for buy-side risk, investment and technology leaders looking to achieve a new level of analytical insight and drive a step-change in performance
Risk culture 2.0: redefining attitudes and behaviours in an era of change
The world is a very different place than it was prior to the Covid-19 pandemic. From changing work patterns and operational change to geopolitical tensions and rampant inflation, risk departments have never been under so much pressure
Rethinking risk and operational resilience post‑Covid‑19
In a Risk.net panel session, convened in collaboration with Fusion Risk Management, experts discussed five themes on re-evaluating existing operational resilience strategies
Hyperautomation in anti-financial crime: powering transformation
This report explores the need for banks to invest in AFC operations that are more effective and efficient
Op risk data: Glencore hauled over the coals in $1bn+ bribery probe
Also: Russian banks in fraud fails; Citi’s fat-finger fumble; devil’s in the data detail. Data by ORX News
ORX to launch controls benchmarking service
App will be delivered via start-up tech platform led by former HSBC op risk chief
Correlations in operational risk stress testing: use and abuse
The paper presents an analysis of correlation effects of economic factors on the operational risk losses of a medium-large UK retail bank, and it recommends that causal factors that effect operational risk should be identified.
Polish mortgage claims push RBI’s op risk up 43%
Following the latest increase, op risk makes up 11% of the bank’s total RWAs
How will US regulators perform the Basel III balancing act?
Largest banks seek offsets for higher capital requirements caused by possible end of IRB, IMM
Active credit portfolio management: audiocast
In this Risk.net audiocast, Zoi Fletcher speaks to Biagio Giacalone and Alexis Hamar about how active credit portfolio management can be the linchpin of improved risk/reward ratios and how the efficient use of capital drives banks’ overall profitability.
BlackRock calls for blockchain to fix futures processing snags
Asset manager wants industry to move faster in adopting “single source of truth” model
What drives the convertible bond market?
This whitepaper looks at the key drivers that influence the convertible bond market and how it provides unique opportunities for both investors and issuers.
Take advantage of relative value credit opportunities with advanced bond analytics
This whitepaper explores the challenges of bond analytics and how access to the right analytics can provide opportunities for more comprehensive trading strategies.
Op risk data: Deutsche greenwashing fine a regulatory red flag
Also: Class claim costs CA tribe $500m; Essilor eyeballs JPM in fraud case; Bank of Italy con job. Data by ORX News
French tax fraud verdict costs UBS $4.1bn of additional op RWAs
Extra capital charges will be split across the first six months of the year
Mifid II transaction reporting and risk management: the quest for quality
This report is based on a Risk.net survey commissioned by London Stock Exchange Group, which was completed in August 2021.
Avoiding cash drag using equity index futures
Learn how Equity Index futures, from CME Group, can be used to keep a portfolio fully exposed to its benchmark index while allowing cash to remain for operational purposes.
US trading blunder costs Barclays £2.8bn in credit RWAs
The latest hit follows a £540 million provision to cover the over-issuance of structured notes
Risk control 2022: what’s now and what’s next?
Amid a complex and rapidly changing threat landscape, pressure is growing on investment banks to improve the robustness of risk controls across their organisations and take a more forward-looking view of operational risk.
Investment banks: the future of risk control
This Risk.net survey report explores the current state of risk controls in investment banks, the challenges of effective engagement across the three lines of defence, and the opportunity to develop a more dynamic approach to first-line risk control