Operational Risk Management Under Basel II: The Case of the Spanish Financial Services

2005 ◽  
Author(s):  
Ana Fernández Laviada ◽  
Francisco J. Martinez Garcia ◽  
Francisco M. Somohano
Keyword(s):  
Risk Management ◽  
Financial Services ◽  
Operational Risk ◽  
Basel Ii ◽  
Operational Risk Management

scholarly journals Operational Risk Management under Basel II - The Case of An Binh Joint Stock Bank

2016 ◽  
Vol 19 (4) ◽  
pp. 108-126
Author(s):  
Trung Quoc Trinh ◽  
Thuy Thu Pham
Keyword(s):  
Risk Management ◽  
Financial Services ◽  
Commercial Banks ◽  
Banking System ◽  
Operational Risk ◽  
Business Environment ◽  
Basel Ii ◽  
Global Market ◽  
Local Market ◽  
Operational Risk Management

In order to enhance commercial banks’ safety in financial services, Basel Committee on Banking Supervision issued a framework on operational risk management under Basel II. In an ever riskier business environment, it is necessary for Vietnam’s commercial banks to increase their competencies in risk management, especially in operational risk management. This is to ensure a sustainable development for banks in the local market and in the global market as well. In recent years, Vietnam’s commercial banks have developed systems for operational risk management. Therefore, the performance assessment is of importance to improve and enlarge applications on operational risk management, from perceptions, corporate’s culture, procedures to other supportive measures on the field of risk management in Vietnam’s banking system.

Operational risk management in financial institutions: Process assessment in concordance with Basel II

2007 ◽  
Vol 12 (4) ◽  
pp. 321-330 ◽  
Author(s):  
B. Di Renzo ◽  
M. Hillairet ◽  
M. Picard ◽  
A. Rifaut ◽  
C. Bernard ◽  
...  
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Operational Risk ◽  
Basel Ii ◽  
Process Assessment ◽  
Operational Risk Management

Operational Risk Management: A Stochastic Control Framework with Preventive and Corrective Controls

2020 ◽  
Vol 68 (6) ◽  
pp. 1804-1825
Author(s):  
Yuqian Xu ◽  
Lingjiong Zhu ◽  
Michael Pinedo
Keyword(s):  
Risk Management ◽  
Stochastic Control ◽  
Financial Services ◽  
Operational Risk ◽  
Investment Strategy ◽  
Modeling Framework ◽  
Data Set ◽  
Operational Risk Management ◽  
Financial Firms ◽  
Control Framework

Financial services firms are subject to various types of risks. In particular, operational risk is difficult to assess and can be devastating, although it is often perceived by a firm's management as being more controllable than the cost of managing other types of risks. Understanding the management problems associated with operational risk is crucial to the performance of the firm. In “Operational Risk Management: A Stochastic Control Framework with Preventive and Corrective Controls,” Xu, Zhu, and Pinedo introduce a general modeling framework for operational risk management for financial firms. They propose two types of controls and characterize the optimal control policies. They apply their model to a data set from a commercial bank, and through a proper investment strategy, one can achieve a significant performance improvement.

A probabilistic approach to IT risk management in the Basel regulatory framework

2017 ◽  
Vol 25 (2) ◽  
pp. 176-195 ◽  
Author(s):  
Semir Ibrahimovic ◽  
Ulrik Franke
Keyword(s):  
Risk Management ◽  
Banking Sector ◽  
Operational Risk ◽  
Capital Requirements ◽  
Basel Ii ◽  
Direct Impact ◽  
Content Type ◽  
Operational Risk Management ◽  
It Risk Management ◽  
It Risk

Purpose This paper aims to examine the connection between information system (IS) availability and operational risk losses and the capital requirements. As most businesses today become increasingly dependent on information technology (IT) services for continuous operations, IS availability is becoming more important for most industries. However, the banking sector has particular sector-specific concerns that go beyond the direct and indirect losses resulting from unavailability. According to the first pillar of the Basel II accord, IT outages in the banking sector lead to increased capital requirements and thus create an additional regulatory cost, over and above the direct and indirect costs of an outage. Design/methodology/approach A Bayesian belief network (BBN) with nodes representing causal factors has been used for identification of the factors with the greatest influence on IS availability, thus helping in investment decisions. Findings Using the BBN model for making IS availability-related decisions action (e.g. bringing a causal factor up to the best practice level), organization, according to the presented mapping table, would have less operational risk events related to IS availability. This would have direct impact by decreasing losses, related to those events, as well as to decrease the capital requirements, prescribed by the Basel II accord, for covering operational risk losses. Practical implications An institution using the proposed framework can use the mapping table to see which measures for improving IS availability will have a direct impact on operational risk events, thus improving operational risk management. Originality/value The authors mapped the factors causing unavailability of IS system to the rudimentary IT risk management framework implied by the Basel II regulations and, thus, established an otherwise absent link from the IT availability management to operational risk management according to the Basel II framework.

scholarly journals Critical success factors for the implementation of an operational risk management system

2012 ◽  
Vol 10 (1) ◽  
pp. 137-147
Author(s):  
M.D. Gibson ◽  
Jacobus Young
Keyword(s):  
Risk Management ◽  
Financial Services ◽  
Management System ◽  
Critical Success Factors ◽  
Success Factors ◽  
Operational Risk ◽  
Operational Risk Management ◽  
Critical Success ◽  
Risk Management System ◽  
Implementation Failure

Operational risk has become an increasingly important topic within financial institutions resulting in an increased spend on operational risk management solutions. While this is a positive approach, evidence has shown that information technology implementations have tended to have low rates of success. Research has highlighted that a series of defined critical success factors could reduce the risk of implementation failure. Twenty-nine critical success factors were identified by means of a literature review and confirmed by a questionnaire that was distributed to an identified target group within the South African financial services community. Reponses to the questionnaire revealed that 27 of the 29 critical success factors were deemed important and critical to the implementation of an operational risk management system.

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