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.
Highlights from OpRisk North America 2015
News from the leading event for op risk professionals
Decline of FoHFs saps due diligence efforts
Investment consultants accused of offering poor substitute to decent research
Operational controls caused Aviva £17.6m fine
Allocation policies and correct oversight the solution
Cyber insurance targets wayward threat – as best it can
Questions over policy design and coverage blight nascent industry
Judgement-led approach to conduct risk capital draws criticism
Proposal by UK banking watchdog receives mixed initial response
Hit the floor: banks fear Basel curbs for capital models
Regulators argue a backstop is needed to avoid too-low modelled numbers
Pilot study: Learning about risk management from the RAF
Risk disciplines at the UK's Royal Air Force face similar challenges to the financial sector
Risk Books: Risk Culture and Effective Risk Governance
Patricia Jackson discusses her new book and the different factors that influence an effective risk culture.
Top-down culture change biggest challenge, BBA conference hears
But FCA's "tone at the top" focus may hamper progress
Bad culture makes bankers cheat, says new research
Poor professional culture drives bankers to be more dishonest
Top 10 op risks 2015: social media
Social media brings new risks to a bank, but also benefits
Failures recur because of lack of challenge, say managers
Operational risk managers highlight repeat failures at firms
RBS fined £56m for control failures over 2012 IT outage
Poor IT risk management threatened UK financial system
Data sharing platform unites banks against cyber crime
Community data sharing could change cyber risk protocol
Bank of England disaster protocol questioned
Weaknesses highlighted after payment system failure
Energy traders ignore legal risk at their peril
Legal risk can be disastrous but is hard to tackle, argues Kaminski
Basel's operational risk capital revisions welcomed
Basel Committee overhauls standardised approaches
Banks consider sealed trading rooms to reform benchmark procedures
Isolating traders to prevent manipulation
Culture clash: The reasons behind risk culture failure
The dangers of complacency, excessive risk and management failures
Identifying and managing emerging operational risks
Sponsored webinar: MetricStream
Singapore op risk charge many times greater than Solvency II
Increased capital charges for equity and credit spread risk are fine
China commodity finance costs spike after Qingdao fraud
Rising costs and delays in issuing letters of credit deterring SMEs