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.
Where to from here?
Editor Victoria Tozer-Pennington reviews the op risk events from the month that range from volcanic ash clouds to civil fraud.
CBI: Quarter of UK power plants face closure
Independent business lobby group the Confederation of British Industry (CBI) has warned the latest draft of the European Union Directive for Industrial Emissions could force at least a quarter of the UK’s power plants to close, which would raise a major…
Why banks must prepare for a 'black ash' event
Erupting volcanoes do not often show up in scenario plans for financial services firms but they might do from now on.
Institute of Operational Risk names new chairman
Ed Sankey takes over from Philip Martin as head of the Institute of Operational Risk (IOR).
Banks call for new consultation on Cebs op risk guidelines
British Bankers Association submits response to consultation and hearing
BP and CNPC push forward in Iraq despite oil law uncertainty
BP and China National Petroleum Corporation (CNPC) have awarded a raft of other energy and commodities companies deals to start drilling and production in the lucrative Iraqi Rumaila oilfield, which they operate, despite the current lack of a petroleum…
Where's your motivation?
Discussion about incentives to promote good risk management is increasingly gaining relevance for Basel II advanced measurement approach applicants, as well as for banks adopting the standardised approach
Passage to India
It’s a long way from Basel to Mumbai, and it will be a while before India’s banks have fully implemented the Basel II capital requirements framework. OR&R looks at how far they have come, and the obstacles they must overcome on the path ahead
Making Solvency II stick
Dubbed 'Basel for insurers', operational risk management under the Solvency II regime is still mystifying most in the insurance world. This case study highlights the basic issues to consider.
Road to transition
For a moment it looked as if the post-crisis drive for reform was losing momentum. But the Basel Committee on Banking Supervision has established working groups to keep the industry focused, and to propose ways to keep moving forward
A common language
Goldman Sachs’ operational risk management department has two global co-heads, Spyro Karetsos and Mark D’Arcy, who together are using a ‘Rosetta Stone’ approach to break down operational risk language barriers between business lines.
City operational risk exec salaries rising
Demand for operational risk management experience is pushing up salaries.
FSA surprises UK banks with tougher stress tests
Operational risk to be included in future stress tests by the UK regulator.
The case for scenarios in op risk loss databases
Scenario analysis is gaining in popularity following the crisis and loss data consortia are quick to cater for this renewed interest
New RBS task force to drive AMA standard
RBS creates a new body looking at driving efficiencies in op risk management and raising its function to AMA standards.
Banks urge Cebs to rethink operational risk guidelines
New op risk document from Cebs stirs up discord among op risk managers
Goldman Sachs uses scenarios to study reputation risks
US investment bank Goldman Sachs is pioneering scenario analysis as a tool for managing reputational risk
