Operational risk management in financial services and the new Basel accord |
Today's turbulent financial markets, growing regulatory environments, and increasingly complex financial systems have led risk managers to realize the importance of measuring and managing Operational Risk. According to the Basel Committee on Banking Supervision, Operational Risk is the risk of direct or indirect loss resulting from inadequate or failed internal processes, people, and systems or from external events. Infrastructure failures (e.g., information technology, terrorist attacks), fraud (e.g., rogue trading), legal and regulatory risks (e.g., fines), have become the motivators behind the move to proactively manage Operational Risk in large Financial Services Institutions. In this paper we provide an up to date critical review of the most fundamental issues on Operational Risk Management, e.g., methodology, data collection, analytics, implementation, based on practical experience.
Vesna Bogojević Arsić |