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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.

head-of-cogs
All under control

Jeff Roth and Wally Musegades outline how it is possible to reduce exposure through active control management, and for the op risk function to make a positive contribution to business results

Laptop crime scene illustration
Laundering goes virtual

Multiplayer sites such as Second Life might have started out as a bit of innocent fun, but the potential for criminals to use them for underhand financial means demands serious consideration

bbva-head-office
Spanish sensibility

BBVA's global head of operational risk, Jordi Garcia, takes a pragmatic, hands-on approach to managing the Spanish bank's op risk. Duncan Wood talks to this veteran of the industry about the unique quality of Spanish loss data, Basel II and life at the…

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