Operational risk modelling
The time is now
Now is the time for all good insurers to start preparing for Solvency II. Victoria Pennington explains what the new capital requirements for insurers will involve, and assesses the market's readiness for their implementation in 2012
Setting the scene
Scenario analysis is often used to plug the gaps that conventional data can't fill. But it might have more to offer. Duncan Wood investigates
The convenient untruth
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The bigger picture
In 2003, rating agencies considered operational risk as a separate risk category, but quantification problems have prompted them to take an integrated, enterprise risk management approach.
Does Basel II add up?
Are there inconsistencies in the standardised and advanced measurement approaches of the Basel II regulatory framework? Andreas Jobst considers the evidence
A calculated approach
Operational risk economic capital calculation is high on the agenda - at last. So who is using it, and why? A new OR&C Intelligence survey investigates
The only way is up
Until now, op risk and compliance professionals have not been as well remunerated as their counterparts in other risk disciplines. However, with increased demand for those with the right skills, this looks set to change. Peter Madigan reports
Measures for measures
Consistent quantitative operational risk measurement is vital to the health of banks and financial institutions. Andreas Jobst offers guidance on enhanced market practice and risk measurement standards
A narrowing gulf
Many Middle Eastern nations are keen to implement Basel II, and larger banks have been stepping up efforts to develop an op risk framework. But smaller banks are being hindered by a shortage of resources and experienced staff, as Victoria Pennington…
Strength in numbers
Data consortiums for loss information are popping up all over the globe. Why are they proving so popular? Duncan Wood reports
The data puddle challenge
The loss event taxonomies currently in use are inadequate. The worst problem is the lack of clarity with regard to the boundary conditions between risk event categories. Tara McLenaghen explores the issues
Standing on the threshold
A 'one distribution fits all' approach is not the best option for op risk models. Carsten Steinhoff and Rainer Baule explain why a tailor-made model is therefore vital to the accuracy of loss distribution models
How operational risk protocols can forestall disaster
Could the subprime mortgage crisis – now estimated to have cost between $50 billion and $100 billion – be the opportunity that the discipline of operational risk has been waiting for?
Banking on a more advanced approach
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Risk information: science or art?
Industry experts gathered for a roundtable discussion in New York at the end of May to debate the ways firms acquire and use information about risks. Moderated by Ellen Davis
Future options
Operational risk derivatives have been touted for a few years now, but interest in them moves in waves. The current tide is high, however. Duncan Wood tests the water
The principles of distribution fitting
TECHNICAL
Room for improvement
Sungard tops our survey of software vendors, its products proving a hit across the op risk and compliance spectrum. But op risk executives continue to demand more from the software industry, reports Dianne See Morrison
KRIs: that difficult age
Key risk indicators (KRIs) were once the golden child of operational risk, but they are now in the midst of a turbulent adolescence. Peter Madigan asks whether KRIs will start to grow up in the next couple of years