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.
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
Cyber is just a ‘subset of operational risk’, CISO says
Information security should use same framework as op risk, Cyber Risk Europe delegates hear
Operational risk managers told to do less to succeed
Resist temptation to intervene often, says head of op risk at UBS Asset Management
UK financial firms lack ‘basic cyber hygiene’, says FCA
Financial regulator says it will challenge firms more regularly on cyber security
Research on loss data backs up new Basel op risk charge
Study finds op risk losses can be scaled in the same way as tests on engineering models
Euro banks to bear brunt of €115bn SMA capital hike: study
"You will get some winners and some losers, but with this it's mostly losers," says ORX's Carrivick
Regulation: A top 10 op risk concern in 2016
Sponsored Q&A: Abide Financial
Metro Bank aspires to IRB for credit risk
CRO Aileen Gillan discusses UK bank’s approach to culture, conduct and credit risk under Basel II
Careless whispers have a cost
CFTC redefines insider trading for the swaps market