Operational Risk Assesement Tools for Quality Management in Banking Services
AbstractAmong all the different types of risks that can affect financial companies, the operational risk can be the most devastating and the most difficult to anticipate. The management of operational risk is a key component of financial and risk management discipline that drives net income results, 2capital management and customer satisfaction. The present paper contains a statistical analysis in order to determine the number of operational errors as quality based services determinants, depending on the number of transactions performed at the branch unit level. Regression model applied to a sample of 418 branches of a major Romanian bank is used to guide the decision taken by the bank, consistent with its priorities of minimizing the risk and enlarging the customer base ensuring high quality services. The analyisis reveals that the model can predict the quality of the transactions based on the number of operational errors. Under Basel II, this could be a very helpful instrument for banks in order to adjust the capital requirement to the losses due to operational errors, predicted by the model.
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Bibliographic InfoArticle provided by Academy of Economic Studies - Bucharest, Romania in its journal The AMFITEATRU ECONOMIC journal.
Volume (Year): 11 (2009)
Issue (Month): 26 (June)
quality management; operational risk; banking services; binary regression model;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models
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