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.
Correlation of op risk losses could send capital soaring
BB&T auditor's model shows capital measured by LDA might be pushed up by 16–55%
Banks seek to make op risk taxonomies less taxing
Difficulty of devising and implementing taxonomies leads major banks to start sharing ideas
Operational excellence is what the public deserves
Public sector institutions must learn from best practice in the private sector
Small is beautiful in operational risk management
Small firms have many advantages in administering op risk programmes, argues Ariane Chapelle
Options for tackling model risk limited, conference hears
Greater use of models means risk "has significantly increased", says HSBC's Bhaskar
Bangladesh Bank fraud is a comedy of op risk errors
Megan van Ooyen from SAS rounds up the top five operational risk losses for March 2016
Technological nightmares worry Zurich Global Corporate CRO
Cyber crime and nanoparticles represent emerging risks for insurers, says John Scott
European banks face steep op risk capital hike from SMA
Op risk accounts for 28% of US banks’ RWAs, compared with 12% at European banks
BSB aims to develop culture and conduct benchmarks
Standards body “rolling out much broader and deeper assessments in 2016”, says Citi’s Bardrick
US public pensions failing on operational risk
Outdated systems and lax controls expose pension plans to 'operational failure'
OpRisk North America: on AMA, cyber and the role of op risk
Basel Committee’s controversial proposal on op risk modelling spurs debate at US event
Op Risk's annual financial crime survey: have your say
Operational Risk / BAE Systems global survey of financial crime is now open
Photogallery: OpRisk North America 2016
Free-to-view photographs from OpRisk North America 2016
Outsourcing can be beneficial, but it isn’t magic
Making use of third-party vendors changes your risk; it doesn't cause it to vanish
Bank fraud and the macroeconomy
This paper empirically tests for correlations between fraud and the macroeconomy.
A maximum entropy approach to the loss data aggregation problem
This paper examines and compares alternative ways of solving the problem of determining the density of aggregate losses.
A simulation comparison of quantile approximation techniques for compound distributions popular in operational risk
The objective of this paper is to compare numerical approximation techniques in terms of their practical usefulness and potential applicability in an operational risk context.
Evaluating operational risk by an inhomogeneous counting process based on Panjer recursion
This paper proposes a new approach for determining OpVaR using an inhomogeneous counting process based on Panjer recursion as the frequency distribution.
Discarding the AMA could become a source of op risk
Basel Committee's "tantrum-like reaction" is not supported by evidence, say practitioners
Op risk managers must be ‘change agents’, says Fed official
Fed's Gwendolyn Collins calls on op risk managers to be pioneers, not policemen
Dump jargon and engage with business, op risk managers told
Operational risk urged to assume bigger role in strategic and HR decisions
Conference hears fierce criticism of Basel op risk plans
Op risk professionals pour scorn on SMA charge, but some bank experts speak out in favour
Bangladesh central bank governor resigns over theft
Atiur Rahman has resigned following theft of $101 million
Op risk models still needed despite SMA, says regulator
Models “play an important role in quantifying risk”, says OCC's Beth Dugan