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.
Doing the groundwork
The start of Reg NMS's pilot phase in July may have led compliance teams at brokerages to believe most of their work is done. But, as Peter Madigan explains, things are just getting started
The only way is up
Until now, op risk and compliance professionals have not been as well remunerated as their counterparts in other risk disciplines. However, with increased demand for those with the right skills, this looks set to change. Peter Madigan reports
A tough balancing act
The Office of the Comptroller of the Currency, under the watchful eye of deputy comptroller Kevin Bailey, is moving ahead with its Basel II policy. Victoria Pennington reports
Measures for measures
Consistent quantitative operational risk measurement is vital to the health of banks and financial institutions. Andreas Jobst offers guidance on enhanced market practice and risk measurement standards
A narrowing gulf
Many Middle Eastern nations are keen to implement Basel II, and larger banks have been stepping up efforts to develop an op risk framework. But smaller banks are being hindered by a shortage of resources and experienced staff, as Victoria Pennington…
'Big five' retain the consultancy crown
The usual suspects appear at the top of OR&C 's survey of consulting firms, but not without having their heels nipped at by the increasingly advancing competition
Subprime crisis shows why firms need ORM
It's hard to not be a bit worried by the subprime crisis and the spin-off events that have cascaded through the financial markets over the past few weeks. And it is ironic that the crisis kicked off in the US, where regulators have made such an unholy…
The urge to converge
Convergence is a clear goal for many in the industry, but uniform implementation is proving tricky, finds the latest survey from OpRisk & Compliance and Ernst & Young
Algorithmics highlights the most influential op risk events of the past 15 years
Daily news headlines
Australia revises Basel II standardised approaches
Daily news headlines
Keeping the wheels turning
When confronted with business continuity issues, energy giant E.ON used to turn to a printed manual. Now it has introduced a constantly evolving system to deal with BCP challenges. Duncan Wood investigates
The forensic approach
PROFILE: SEBASTIAN FRITZ-MORGENTHAL
Brazil looks to controls
New legislation in Brazil on banking systems and controls has triggered a flood of sales from large accountancy firms and specialist service providers. John Rumsey looks at the new rules and how Brazilian banks are responding
Standing on the threshold
A 'one distribution fits all' approach is not the best option for op risk models. Carsten Steinhoff and Rainer Baule explain why a tailor-made model is therefore vital to the accuracy of loss distribution models
The risk information challenge: Bringing technology to bear
A roundtable discussion hosted by OpRisk&Compliance and sponsored by BearingPoint explored the difficulties around obtaining robust risk information and disseminating intelligence back into the organisation. Moderated by Ellen Davis
How operational risk protocols can forestall disaster
Could the subprime mortgage crisis – now estimated to have cost between $50 billion and $100 billion – be the opportunity that the discipline of operational risk has been waiting for?
Banking on a more advanced approach
Banks must review their advanced measurement approach models if they are to experience a smooth transition under the new Basel II regime. By Thomas Kaiser, of consultants KPMG
Batting for British banks
Angela Knight, chairperson of the British Bankers' Association, talks to Nick Kochan about her hard-earned reputation as the scourge of the international regulatory community
Bringing down the house
There is evidence to support the claim that the subprime mortgage crisis in the US may have had its roots in operational risk problems. But just what caused the crisis, and could it have been averted if the firms involved had robust op risk frameworks in…
In the line of fire
In the global fight against money laundering, financial institutions are developing various hi-tech weapons. Peter Madigan reports
Risk information: science or art?
Industry experts gathered for a roundtable discussion in New York at the end of May to debate the ways firms acquire and use information about risks. Moderated by Ellen Davis
The trouble with GRC
Governance, risk and compliance is posing thorny challenges for many executives
Op risk can learn from Berlin's renaissance
I was in Berlin in June at a conference on business processes. Now, some people might think this is probably not how they would choose to spend their time. But the event was something of a revelation to me.