Advancing op risk management using Japanese banking experience

Japanese banks used to control operational risk with qualitative risk management, including checklists and operations manuals. It was thought that measuring operational risk was very difficult, since it covered various risks such as process risk, system risk, legal risk and others. In the past, there were some Japanese banks that defined operational risk as a non-measurable risk.

In the past few years, however, most large Japanese banks have sought to enhance their operational risk management