Operational Risk by Edu Pristine

Author of lecture Operational Risk

Edu Pristine

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... that is not market or credit risk. But this is a very broad definition of operational risk. The Basel definition of operational risk is “the ...

... -Beta factor for each business line is multiplied with the annual gross income of the business line over the period of 3 years. -The results are then added to arrive at total operational risk capital charge. The advanced measurement approach ...

... capital requirement currently proposed by the Basel Committee is equal to the unexpected loss in a ...

... 2. Internal Fraud 3. External Fraud 4. Damage to physical assets 5. Execution, delivery and process management ...

... a specific period of time. Loss frequency is often modeled with Poisson distribution. In Poisson distribution, mean and standard deviation is equal to the single parameter, lambda ...

... Banks should use both internal and external data to estimate the severity of losses. ...

... scenarios are created to incorporate the events that have not yet occurred. Regulators have encouraged the use of scenario analysis ...

... discover potential operational risk events. There are three forward looking methods: 1. Causal ...

... capital to manage operational risk. Less capital will be allocated to those business units which are able to reduce the frequency and severity ...

... of the operational risk losses are likely to occur in the tails Insurance. There are many insurance companies which provide in surance for operational ...