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.
Op risk data: Santander in car crash of motor-finance fail
Also: Macquarie fined for fake metals trade flaws, Metro makes AML misses, and Invesco red-faced over greenwashing. Data by ORX News
CFTC weighs third-party risk rules for CCPs
Clearing houses could be required to formally identify and monitor critical vendors
New CME guidance to drive tighter margin call management
Clearing house rule clarified to limit the use of grace periods to cases of admin/operational errors only
Too ’Berg to fail? What October’s Instant Bloomberg outage means for the industry
The ubiquitous communications platform is vital for traders around the globe, especially in fixed income and exotic derivatives. When it fails, the disruption can be great
Japanese G-Sibs see 9% surge in op risk charges
Rising profits drive record RWA growth under new Basel framework
Op risk data: At Trafigura, a $1 billion miss in Mongolia
Also: Insurance cartels, Santander settlement and TSB’s “woeful” customer treatment. Data by ORX News
Cyber risk can be modelled like credit risk, says Richmond Fed
US supervisors may begin to use historical datasets to assess risk at banks and system-wide
Basel III slashes $78bn in RWAs from top Singapore banks
Credit and operational risk recalibrations fuel double-digit falls at DBS, OCBC and UOB
Unraveling Lebanon’s financial crisis: the path from promise to peril, delving into a risk strategist’s own experience
The author investigates the causes of Lebanon's financial crisis which began in 2019 and puts forward suggestions with which to restore trust and stability.
Consolidation of Arval exposures adds €20bn to BNP Paribas’ RWAs
Bank shifts exposures from soon-to-be retired equity IRB treatment to standardised approach
Foreign banks want level playing field in US Basel III redraft
IHCs say capital charges for op risk and inter-affiliate trades out of line with US-based peers
Artificial intelligence in crisis management: a bibliometric analysis
The authors carry out a bibliometric analysis of academic papers in the field of artificial intelligence applications in crisis management and propose potential new directions for researchers in this field.
A qualitative study of operational resilience in financial institutions
The authors analyze data from a qualitative survey of senior G-SIB employees to identify recommendations for organisations looking to improve their operational resilience.
US primary dealers mark largest settlement failures to date under T+1
Hung-trade volumes hit highest in two years at the end of September
Op risk data: Macquarie mauled by securities mismarks
Also: Danske’s costliest branch, tedious times for TD, and WhatsApp won’t stop. Data by ORX News
MUFG blocks vendors that refuse to reveal subcontractors
Risk Live: US arm of Japanese megabank asks first line to sign written waivers when risk advisories are ignored
FSB promotes convergence on operational incident reporting
As global body proposes common reporting format, official says there may be an optimum time window
US cyber cops: report hacks without fear of sanction
Risk Live: Cyber incident reports won’t automatically be referred to regulators, investigators say
Nine jurisdictions yet to finalise Basel III rules
Turkey and South Africa worst laggards, with no final drafts published
Rough patch: CrowdStrike sparks an auto-update debate
Automating software updates helps keep hackers at bay but can introduce op risk; banks balance the two
Banks urged to boost third-party scrutiny amid AML crackdown
Three US regulators highlight deficiencies in banks’ due diligence on fintech partners