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: At Trafigura, a $1 billion miss in Mongolia
Also: Insurance cartels, Santander settlement and TSB’s “woeful” customer treatment. Data by ORX News
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
Op risk data: Shady loans robbing Reliance of $1.1bn
Also: H20’s less-than-liquid holdings, Ripple ripped for $125m, and more WhatsApp slaps expected. Data by ORX News
Should banks risk lightning hitting twice for CrowdStrike?
Bank tech teams divided on whether to give security vendor a second chance after update crash
TD Bank’s op risk charges spike amid anti-money laundering probe
Record-high RWAs push bank’s core ratio to its lowest in four years
Risk management overhauls juggle speed and independence
Some banks say the 1.5 line of defence responds faster to risk, but supervisors are still divided
Let’s grow the third-party risk playbook – CME security chief
CrowdStrike outage highlights need for financial sector to adjust its game plan
Bankers hope EBA op risk taxonomy will go global
Proposed update to 20-year-old risk map is welcomed, but international co-ordination urged
How is risk culture conceptualized in organizations? The pan-industry risk culture (PIRC) model
This paper puts forward a pan-industry risk culture as a framework through which to proactively manage risk culture.
NatWest, StanChart, Nationwide drive record op RWAs at UK banks
BoE data shows operational risk RWAs highest going back to 2014