Operations Risk

Operations Risk focuses on areas such as technology risk, people risk, and settlement risk, examining the dangers within different organizations. Case studies throughout the book illustrate how risk can become magnified and ultimately become a serious danger to the businesses concerned. Operations Risk challenges readers to interpret given situations to understand the impact of the risks and devise solutions through a series of exercises included in the relevant chapters (with answers provided). This self-test approach reinforces understanding of the detailed material contained throughout the book.

Introduction	p. viii
The Operational Risk Universe	p. 1
Post barings	p. 5
The influence of BIS	p. 6
Operational risk management	p. 6
Types of risk	p. 7
Defining Operations Risk in Investment and Retail Banking	p. 8
Retail banking	p. 8
Managing operations risk in retail banking	p. 9
Types of operations risk affecting retail banks	p. 11
Customer account errors	p. 12
Immediate observations	p. 12
Possible outcomes	p. 12
Action	p. 13
Risk impact	p. 13
Damage limitation and preventative action	p. 13
Managing other operations risks	p. 14
Risk in Investment Banking	p. 14
Operations Risk	p. 16
Analysing the risk value	p. 19
Summary of operations risk	p. 22
Market risk	p. 22
Management risk	p. 23
Market or principal risk	p. 23
Credit or counterparty risk	p. 25
Operational risk	p. 25
Other risks	p. 32
Understanding risk	p. 33
Operations management	p. 34
Managing the Risk	p. 35
How does the business manage operations risk?	p. 35
Devising a strategy to manage operations risk	p. 36
Self-assessment techniques	p. 36
"Risk envelopes"	p. 38
"Risk waves"	p. 39
"Risk scoring"	p. 41
"Fishbone analysis of cause"	p. 42
Risk volcanoes	p. 43
Summary	p. 45
Understanding a Risk Event	p. 46
Pre-event	p. 46
Time lag	p. 49
Realisation	p. 49
Mitigation	p. 50
Lessons learned	p. 51
Workflow and Operations Risk	p. 52
People	p. 52
Management	p. 54
Analysing risk in the workflow	p. 55
Analysing workflow	p. 56
Risk and Regulation	p. 60
Regulation in respect of custody services	p. 62
Regulation affecting brokers and fund management companies	p. 62
Exchange and clearing house regulation	p. 63
Summary details on regulation	p. 63
Summary	p. 64
Innovative Tools to Manage People Risks	p. 65
Analysing Hypnotherapy as a tool to reduce operations risk	p. 65
Hypnotherapy	p. 67
Insourcing and Outsourcing Risk	p. 69
Guiding principles - Overview	p. 69
German loan factory	p. 71
Australian regulator investigates bank outsourcing	p. 71
Outsourcing unit pricing for managed funds	p. 72
OCC action against a bank and service provider	p. 72
Joint examinations of third-party service providers in the United States	p. 73
Summary	p. 75
Glossary of risk terminology	p. 76
Consolidated KYC risk management	p. 89
A collection of excerpts and published operational risk guidelines and recommendations	p. 96
Global clearing and settlement - The G30 twenty recommendations	p. 105
ISSA recommendations 2000	p. 116
Index	p. 171
Table of Contents provided by Ingram. All Rights Reserved.

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