OpRisk Europe: FSA condemns operational risk weaknesses
Financial institutions have failed to properly manage their operational risk in recent years and can expect to be subjected to higher requirements in future, an official from the UK Financial Services Authority (FSA) warned yesterday.
Speaking at the OpRisk Europe conference in London, Frances Allen, team leader in the FSA's prudential risk division, said attention to operational risk had been "sparse" and firms need to up their game to ensure they hold enough capital against operational risk events. "Operational risk inadequacies contributed to the size of some of the losses that occurred... risk managers should be playing a stronger and more independent role in the future," she said.
"Starting with [rogue trader Jérôme
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