U.S. supervisory standards for operational risk management
The U.S. bank supervisory agencies recently issued for public comment revised guidance regarding the implementation of the proposed Basel II-related, risk-based capital requirements. Among the revisions is an important update to guidance regarding operational risk management. Operational risk generally refers to the risk of monetary losses resulting from inadequate or failed internal processes, people, and systems, or from external events, such as natural disasters. ; For other dimensions of risk, such as credit and market risk, the Basel II framework includes considerable detail on using economic models for quantifying risk exposures. However, operational risk is a relatively new field, so understandably financial institutions have made less progress in developing formal models for it. Therefore, the supervisory agencies have emphasized standards regarding robust systems for operational risk management among banking organizations. This Economic Letter reviews key components of the U.S. supervisory standards proposed in the recent guidance and of recent survey data regarding how operational risk management systems are being implemented worldwide.
Volume (Year): (2007)
Issue (Month): may4 ()
|Contact details of provider:|| Postal: |
Phone: (415) 974-2000
Fax: (415) 974-3333
Web page: http://www.frbsf.org/
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cummins, J. David & Lewis, Christopher M. & Wei, Ran, 2006. "The market value impact of operational loss events for US banks and insurers," Journal of Banking & Finance, Elsevier, vol. 30(10), pages 2605-2634, October.
When requesting a correction, please mention this item's handle: RePEc:fip:fedfel:y:2007:i:may4:n:2007-11. 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: (Noah Pollaczek)
If references are entirely missing, you can add them using this form.