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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Serie: Wiley Global Finance Executive Select
- Sprache: Englisch
Banking is at the forefront of the effort to quantify and measure operational risk and as such can be role model beyond the financial services industry. The Basel Committee of the Bank for International Settlements (BIS) has created a new capital accord, known as Basel II. Basel II requires banks to establish an operational risk management (ORM) framework and compute an explicit capital charge for operational risk once it is adopted. This chapter from Goverance, Risk, and Compliance Handbook, by Anthony Tarantino, outlines different approaches, tools, and guidance on operational risk management for financial services companies.
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Seitenzahl: 44
Veröffentlichungsjahr: 2010
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Contents
Cover
Title Page
Copyright
CHAPTER 17: Operational Risk Management In Financial Services
17.1 INTRODUCTION
17.2 APPROACHES TO OPERATIONAL RISK MANAGEMENT
17.3 BANKING DOCUMENTATION
17.4 OPERATIONAL RISK TOOLS OVERVIEW
17.5 U.S. NPR: AMA APPROACHES FOR OPERATIONAL RISK
Notes
Copyright © 2008 by John Wiley & Sons, Inc. All rights reserved.
Disclaimer: This content is excerpted from Governance, Risk, and Compliance Handbook, by Anthony Tarantino (9780470095898, February 2008), with permission from the publisher John Wiley & Sons. You may not make any other use, or authorize others to make any other use of this excerpt, in any print or non-print format, including electronic or multimedia.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
Banking is at the forefront of the effort to quantify and measure operational risk and as such can be role model beyond the financial services industry. The Basel Committee of the Bank for International Settlements (BIS) has created a new capital accord, known as Basel II. Basel II requires banks to establish an operational risk management (ORM) framework and compute an explicit capital charge for operational risk once it is adopted. This chapter from Goverance, Risk, and Compliance Handbook, by Anthony Tarantino, outlines different approaches, tools, and guidance on operational risk management for financial services companies.
Derived from Tarantino, Anthony. Governance, Risk, and Compliance Handbook. Hoboken, NJ: John Wiley & Sons, Inc., 2008. 9780470095898; 972 pp.
978-0-470-90969-0978-0-470-90968-3
CHAPTER 17
OPERATIONAL RISK MANAGEMENT IN FINANCIAL SERVICES
Anthony Tarantino, PhD
17.1 INTRODUCTION
(a) Rating Agency Requirements
17.2 APPROACHES TO OPERATIONAL RISK MANAGEMENT
(a) The Basic Indicator Approach (BIA)
(b) The Standardized Approach (TSA)
(c) The Alternate Standard Approach (ASA)
(d) The Advanced Measurement Approach (AMA)
17.3 BANKING DOCUMENTATION
17.4 OPERATIONAL RISK TOOLS OVERVIEW
(a) Qualitative Tool: Risk Control Self-Assessment (RCSA)
(b) Qualitative Tool: Scorecards
(c) Qualitative Tool: Key Risk Indicators
(d) Qualitative Tool: Scenarios
(e) Quantitative Tool: Internal Loss Data
(f) Quantitative Tool: External Data
17.5 U.S. NPR: AMA APPROACHES FOR OPERATIONAL RISK
(a) Background
(b) Operational Risk Management
(i) Governance
(ii) Board of Directors and Management Oversight
(iii) Firmwide Operational Risk Management Function
(iv) Line of Business Management
(v) Reporting
(c) Operational Risk Data and Assessment
(i) Capture and Maintenance of Elements
(ii) Internal Operational Loss Event Data
(iii) External Operational Loss Event Data
(iv) Scenario Analysis
(v) Business Environment and Internal Control Factors
(d) Operational Risk Quantification
(i) Analytical Framework
(ii) Eligible Operational Risk Offsets
(iii) Unit of Measure
(iv) Accounting for Dependence
(v) Risk Mitigation
(vi)Alternative Approaches for Depository Institutions
(vii)Documentation of Operational Risk Quantification Systems
NOTES
17.1 INTRODUCTION
Banking is at the forefront of the effort to quantify and measure operational risk and as such can be a role model beyond the financial services industry. The Basel Committee of the Bank for International Settlements (BIS) has created a new capital accord, known as Basel II. Basel II requires banks to establish an operational risk management (ORM) framework and compute an explicit capital charge for operational risk once it is adopted. Banks will need to be flexible and open to new approaches in managing operational risk.
Banks have historically defined operational risk as risk that did not fall into credit, market, or liquidity risk categories. Basel II has narrowed the definition somewhat as the loss, or risk of loss, resulting from inadequate or failed internal processes, people, or systems or from external events. This definition typically includes legal risk, but excludes strategic and reputational risk.
Most global banks will fall under the Basel II accord, which requires quantitative, qualitative, and modeling analysis of operational risk. The costs of meeting these requirements will typically run into several million dollars. While not all these banking requirements are applicable to other industries, they do provide a role model worth considering. All businesses face the challenge of balancing risks with opportunities and can easily quantify the monetary value of opportunities. Many fewer can quantify the monetary value of the operational risks.
The Basel Committee of BIS describes basic principles in improving operational risk management, which cover:
Developing an appropriate risk management environmentRisk management: identification, measurement, monitoring, and controlRole of supervisorsRole of disclosure1DEVELOPING AN APPROPRIATE RISK MANAGEMENT ENVIRONMENT
Board awareness and approval of the major aspects of operational risk and risk management as a distinct and controllable risk categoryBoard approval and periodic review of operational risk strategy, which reflects the tolerance for risk categorizationManagement ownership and management of the board-approved operational risk strategy on an enterprise-wide level, including the applicable training, policies, procedures, and reward mechanismsThe flow of information, which reinforces a robust operational risk culture at all levels of the organizationRISK MANAGEMENT: IDENTIFICATION, MEASUREMENT, MONITORING, AND CONTROL
