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.
Cost of control: balancing risk and expense
Cost of control
AMA and loss data collection on the rise at US banks
More US banks expected to employ AMA, while new stress-testing proposals increase interest in operational risk quantification among smaller banks
Market volatility may have brought UBS losses to light
The revelation of rogue trading at UBS follows a period of market volatility. That is nothing new, say risk managers
UK's ICB report a further complication for banks
The ICB's final report gives banks another layer of capital requirements to deal with
Foster pleads guilty to $22m fraud
Former vice-president of Citigroup's treasury finance department admits embezzlement
ICB's ring-fencing may spell the end for free banking
Industry experts fear ring-fencing of banks' retail operations as proposed in the ICB's interim report may spell the end for free banking in the UK
Insurers lack confidence in Solvency II data
Only 21% are highly confident about model data quality
LV= appoints Haynes as chief risk officer
Steve Haynes takes up chief risk officer post at LV=
Inclusion of legal losses in op risk databases has banks fretting
Banks worry Basel rules requiring legal events to be included in operational risk databases earlier might mean the information is used against them in legal proceedings
Banks face high costs for Fatca compliance
Banks might need to set aside up to 40% of their operations change budget to make themselves Fatca compliant
BBVA given deadline to improve AMA model
BBVA has been given until December 2011 to make improvements to its AMA model by the Bank of Spain, or will not obtain the capital savings the AMA allows
EBA to publish governance and op risk guidelines in September and October
EBA op risk specialist Bernd Rummel says the new European body has a busy schedule of work to implement CRD IV
ABI redundancies in the face of Solvency II
Shake-up will also entail "resourcing-up" Oric to help members prepare for internal op risk modelling
IIF calls for co-ordination in banking and insurance regulation
In its latest report, the IIF calls for cross-sector co-ordination in banking and insurance regulation
BoA appoints Laughlin as chief risk officer
Replaces Bruce Thompson, who becomes chief financial officer
DTCC appoints new group chief risk officer
Noel Donohoe will head ERM, op risk and systemic risk teams
Berg new CRO at Swedbank
Crisis specialist Berg takes over as chief risk officer at Swedish bank
Aviva Europe appoints new chief risk officer
Doug Brown joins insurer
SEC commissioner Casey steps down
End of term for longest-serving US regulator
Operational risk data finds fraud and losses falling
Operational risk data, September 2011
NCUA sues Goldman Sachs for $491 million
Bank mis-sold mortgage-backed securities to credit unions, regulator says
SEC obtains restraining order against Select Asset Management
$52 million fraud misused investor capital, SEC claims
SEC freezes $32.5 million of Swiss entities' assets
Court favours insider-trading suspicions in Arch Chemicals case