Advanced Search
MyIDEAS: Login to save this article or follow this journal

Operational Risk – Challenges for Banking Industry

Contents:

Author Info

  • Marija Knezevic

    ()
    (Procredit Bank, Belgrade)

Registered author(s):

    Abstract

    Operational risk covers wide range of events that either produce no effect on financial result of the institution or can strongly harm it. Although it is present in the banking activity from its origins, industry interest increases during last decades of XX century. Basel II gave significant incentives in managing operational risk processes in banks all over the world. New, Basel III regulation imposes improvement in operational risk management indirectly, through guidelines for better management of liquidity and credit risk, thus emphasizing the importance of the most intangible factors of operational risk – internal factor contained in inadequate processes and procedures. In Serbian banking system the most important contribution of Basel standard implementation was raising awareness of the presence of this kind of risk, although it is still in the initial phase. High impact on the operational risk drivers has macroeconomic environment, banking system structure and client type that are offered financial support. Having in mind that banks offers in Serbia are primarily oriented toward retail clients, it is not surprising that the most important factor of operational risk, regarding number of risk events, are human errors with 54% in total. However, majority of financial losses are derived from clients’ frauds, more than 70%. In this paper, author indicates the most important factors and events of operational risk that are present in retail banks in Serbia and their sources as a key element in mitigating their negative effects in the future.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.ien.bg.ac.rs/index.php/en/2013/2013-1-2
    Download Restriction: no

    Bibliographic Info

    Article provided by Institute of Economic Sciences in its journal Economic Analysis.

    Volume (Year): 46 (2013)
    Issue (Month): 1-2 ()
    Pages: 40-52

    as in new window
    Handle: RePEc:ibg:eajour:v:46:y:2013:i:1-2:p:40-52

    Contact details of provider:
    Postal: 12 Zmaj Jovina St, 11000 Belgrade, Serbia
    Phone: +381 11 2622 357, 2623-055
    Fax: +381 11 2181 471
    Email:
    Web page: http://www.ien.bg.ac.rs
    More information through EDIRC

    Related research

    Keywords: Operational risk; Basel regulation; banking sector; operational risk factors; operational risk events; internal processes; frauds; human errors;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ibg:eajour:v:46:y:2013:i:1-2:p:40-52. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zorica Bozic).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.