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.
Creating business value: Measuring the return of improved data management
Sponsored survey analysis: Oracle Financial Services
Even for me, AMA models are too complicated
The AMA doesn’t make any sense – but the idea of a single, simple equation does, writes Ruben Cohen
Banks told to seize moment to devise new op risk charge
Banks should “get clever and develop their own model” in response to SMA, says UK bank risk manager
Best fraud detection product: Clari5
Financial crime-management system uses collective intelligence and responds to changes in a client's behaviour over time
Law firm of the year: Stephenson Harwood
Small is beautiful for the regulatory litigation practice, representing banks in high-profile cases
Asset manager of the year: AllianceBernstein
AllianceBernstein reduces costly operational blunders by bringing risk to the fore
Bank of the year: UBS
Risk management failures cause the bank to revamp its op risk programme
Best operational risk initiative: Oric’s Scenario universe and Principles of operational risk management and measurement
The consortium wins with a definitive set of op risk scenarios that insurers can use to identify which one is relevant
Best newcomer: Capital Preferences
Its Economic Fingerprint product uses basic games to tease out a client's 'revealed preferences' in terms of their attitude to risk
Regulator of the year: Australian Prudential Regulation Authority
Apra wins praise for pushing business case for op risk modelling and scenario analysis
Best GRC product and Best operational risk product: Nasdaq BWise
The vendor, a leader in the governance, risk and compliance space, scores with rapid deployment solutions
Best risk analytics tool, Best stress testing product and Best overall product: The Analytics Boutique
OpCapital Analytics has been implemented at 10 institutions, including banks and insurance companies
Consultancy of the year: PwC
PwC goes back to basics to simplify how clients approach risk management
Insurer of the year: MassMutual
US life insurer makes strides in op risk with corporate culture and IT
The growing pull of public cloud for banks and regulators
Adoption by the FCA for Mifid II data reporting indicates public cloud satisfies regulatory, security and reliability requirements
Changing times mean a tougher job for op risk managers
Wave of organisational change at major banks heightens operational risk exposure
The beginning of the end for footloose modelling
US model risk guidance has drawbacks, but is a step towards better management of model risk
Fed paper stirs debate on new operational risk charge
Researchers offer academic justification for Basel's standardised measurement approach
A simulation comparison of aggregation periods for estimating correlations within operational loss data
This paper investigates the differences in the values of correlations based on different aggregation periods of time series loss data.
Weighing criticism of the SMA reveals a lack of balance
Operational risk managers are becoming unusually excitable, with some justification
Interview: Iosco’s Andrews stresses CCP resilience and recovery
CCP resolution spells regulatory failure; guidance to follow on PFMIs and CCP stress-testing
Benchmark misery will continue to plague banks
Index rigging caused $574 million of op risk losses in May, writes Megan van Ooyen from SAS
OpRisk Europe: on cyber, risk governance and Basel’s SMA
OpRisk and Cyber Risk Europe conferences spark debate on role of op risk and cyber security
Three lines of defence a struggle, say op risk heads
Separation "theoretically perfect" but "practically, hugely flawed" says UBS's Hunt