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.

The stagnancy of risk transfer

It's fairly clear from our feature on alternative forms of risk transfer for op risk that not much has happened in this space over the past two years, despite a lot of fine words from both the insurance industry and its clients.

A Shakespeare moment

There I was, sitting in a stuffy conference room in Brussels, watching what I like to call a ‘Shakespeare moment’ – when people interact in a way that captures a part of the essence of human behaviour.

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