Operational Risk Process Models von Edu Pristine

Dozent des Vortrages Operational Risk Process Models

Edu Pristine

Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, EduPristine is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, Operational Risk Modeling etc. It was founded by industry professionals who have worked in the area of investment banking and private equity in organizations such as Goldman Sachs, Crisil - A Standard & Poors Company, Standard Chartered and Accenture.

EduPristine has conducted corporate training for various leading corporations and colleges like JP Morgan, Bank of America, Ernst & Young, Accenture, HSBC, IIM C, NUS Singapore etc. EduPristine has conducted more than 500,000 man-hours of quality training in finance.
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... Describe how to develop and apply operational risk models. Describe the various ORM tools. Describe the top-down models. ...

... Corporate Programs: Corporations have achieved significant benefits from their risk management programs; among these are stock price improvement, debt rating upgrades, early warning of risks, loss reduction, and regulatory capital relief. Technology Development: Over the past decade, technology developments have transformed how business operate. ...

... As such, many companies have implemented programmes to identify, monitor and improve their business processes. In addition to process improvement, companies have also implemented risk assessment processes to identify key operational risks. These risk assessments are either performed by the business ...

... that may prevent them from achieving their key objectives 3. Define performance and risk metrics, including goals and MAPs: For each core process of the company, performance metrics and risk metrics should be clearly defined. 4. Implement organizational and risk mitigation strategies: ...

... its frequency and severity & assess internal controls. Usually monitored through Questionnaires - KRI: Quantitative measures that serve as indicators & early warning signal for OR. E.g. Employee Absenteeism - Loss database: Internal loss database recording each OR loss along with ...

... volatility due to credit and market risk is subtracted. Residual is attributed to OR. - Analogue model: Benchmarking with external institutions with comparable structure and operations and derive OR capital by scaling up/down capital kept by the other institution. All top-down approaches fail to capture low frequency high severity risks. ...

... each loss type and business line. - Advance Measurement Approach of Basel II is a bottom-up approach. - Bottom-up models generate OR loss distribution either using: Statistical models: Models are used to generate loss distribution. ...

... - Reflect changes in environment and external factors: like changes in regulatory requirements - Incorporate risk interdependencies: Many times OR combines with credit ...

... should lead to more timely communication and escalation of operational risk issues. Additionally management should clearly communicate when they should be informed through a cascading set of ‘escalation triggers’, which would lead to the appropriate decisions and actions on the part of management. Escalation triggers can be defined in terms of the KRIs, such as the level of operational losses, the number of ...

... return because of cost of risk transfer/ Change in Economic capital requirement due to risk transfer). - Change in return: Risk transfer techniques tend to reduce return, as these involve costs - Change in EC requirement: Risk transfer techniques reduce capital requirement for OR, ...

... Stakeholders objectives: Buyers of outsourcing should first establish an overall outsourcing strategy. This strategy would identify the IT systems and/or applications that are outsource candidates, the approach to evaluating alternative outsource providers and solutions and the decision processes and cost-benefit analyses that will result in specific outsourcing transactions. Buyers of outsourcing services often cite the following expected benefits: Cost savings, access to IT skills and advanced technologies, quality of services, ...

... process requests, defect rates, end-user satisfaction, standard compliance etc. Risk mitigation: One of the first and most important steps in mitigating outsourcing risk is to fully evaluate the economic costs and benefits at the onset, including consideration of all critical risk factors. ...