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.
Banks voice fresh concerns over CCP non-default losses
Dealers could face cash calls to recapitalise an ailing CCP that suffers a critical non-default loss under FSB proposals
The problems with conduct risk loss aggregation
Aggregation of conduct risk losses is recommended practice, but it can seriously distort capital calculations
Banks seek to pry open CCP black boxes
Clarity on model inputs may have averted Brexit chaos, FCMs claim
Energy firms assess costs of cyber attacks
Analytics are considered key to cyber risk management
Op risk survey shows the insidious effects of political risk
Rise in geopolitical turmoil drives other risk factors, suggests a network analysis of 2017's survey
A nonlinear analysis of operational risk events in Australian banks
This paper proposes a methodology applied to complex systems to analyze operational risk events in Australian banks.
Doubts and ambiguity remain around forex code of conduct
Customers face more responsibility for understanding dealing terms and more measures may be needed, sources say
Top 10 operational risks for 2017
Risk.net presents the top 10 operational risks of 2017, as chosen by risk practitioners
Cyber is top op risk for 2017, say CROs
This year's Top 10 Operational Risks survey highlights sharp rise in geopolitical risk following Brexit and Trump election
Hidden benefits of the Fed’s model validation push
Incidents such as the London Whale losses show an overhaul of model validation should be welcomed, not maligned
Goldman’s mortgage mis-selling fine tops 2016 op risk losses
Legal settlements with US regulators dominate the year's biggest operational risk charges
OCC fines Usher and Ramchandani $5m each in FX ‘Cartel’ probe
Former traders were indicted by the DoJ for the same offences
What lies beneath: attention lessons for risk managers
Allowing seemingly irrelevant problems to fester can lead to catastrophe
Intesa Sanpaolo takes $235 million hit for AML failures
Megan van Ooyen from SAS rounds up the top five operational risk losses for December 2016
US indicts three in forex rigging probe
Accused UK-based traders face maximum 10 years in prison and $1m in fines
Reputation model reveals how banks drag each other down
Network study shows bottom-line impact of bad news elsewhere
SMA data shortfalls ‘make op risk review a must’
New research adds to criticism of proposed op risk capital method
EC umbrella plan dismays foreign banks
EU intermediate holding company proposal complicates legal entity structures and Brexit planning
Review of 2016: turn and face the strange
Post-crisis reform has caused upheaval, but gave recent years a sense of direction; in 2016, that was missing
Fed economist advocates combining internal models with SMA
SMA could act as a floor for calculating op risk RWAs, suggests Filippo Curti
Exclude internal stress tests from CCAR, says US auditor
GAO says internal tests weaken incentives for banks to create 'meaningful and severe stress tests'
Eiopa stress test highlights UK reliance on matching adjustment
Tests reveal how unwelcome any watering down of key measure would be
Commodities traders question EU’s insider trading regime
Esma guidance on Mar leaves market in the dark, say critics – particularly for hedges
Europe’s banks fret over US stress tests
CCAR could expose weaknesses in capital planning at foreign banks