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Managing operational risk in relation to internal capital adequacy assessment process (ICAAP)

Author

Listed:
  • Baijal, Rajat

    (Managing Director–Global Head of Enterprise Risk, Cantor Fitzgerald, UK)

Abstract

As banks struggle to quantify operational risk in relation to their internal capital adequacy assessment process (ICAAP), it becomes critical to align the various elements of the risk framework to make an informed judgement. This is where internal processes such as the risk and control self-assessment (RCSA), risk event management and scenario analysis play a key role in understanding and quantifying operational risk. When combined, outputs from each of these individual processes provide a powerful input for operational risk capital calculation. Additionally, the culture and conduct of the firm will play a pivotal role in implementing a robust framework, which further assists the management in meeting the requirements of the ICAAP.

Suggested Citation

  • Baijal, Rajat, 2017. "Managing operational risk in relation to internal capital adequacy assessment process (ICAAP)," Journal of Securities Operations & Custody, Henry Stewart Publications, vol. 9(2), pages 185-191, March.
    • Handle: RePEc:aza:jsoc00:y:2017:v:9:i:2:p:185-191
    as

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    More about this item

    Keywords

    operational risk; ICAAP; scenario analysis; conduct risk; loss distribution;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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