Operational Risk 2.0

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Operational Risk 2.0 looks beyond the implementation of Basel II, to how op risk executives can use the tools, intelligence and techniques at their disposal to better inform senior management and the board of directors about the challenges they face.

The discipline of operational risk is at a crossroads. Common questions currently asked include: How does the discipline add value to my organisation? What does the advanced measurement approach’s modelling techniques say about the op risks my firm is facing? What is the strategic role of operational risk my firm should adopt?

Operational Risk 2.0 is recommended for operational risk professionals assessing the development of both the discipline and their careers. This pioneering guide presents the current thinking on how operational risk will develop and provides you with practical techniques and advice on:
- Improving data and control self-assessment programmes;
- The relationship between op risk and an enterprise risk framework;
- Developing a value-adding op risk governance structure;
- Taking your firm’s AMA to the next evolutionary stage.
It will also help you to follow the lead of firms such as Lloyds TSB, JP Morgan and DBS, who are already embracing the use of improved management concepts and techniques. Real-life case studies help readers relate the concepts discussed to their own experiences and firm structures. Advice and insight from regulatory executives such as the US’s FDIC and Germany’s Bundesbank are also included.

This multi-contributor book consists of 15 chapters from a wide range of thought-leaders from around the world including Him Chuan Lim, Eric Holmquist, Johannes Voit, Jeremy Quick, and Ashish Dev. Each chapter addresses a particular subject with both theory and practical advice that you will be able to implement in your own firm.

Operational Risk 2.0 represents the logical next step in the evolution of operational risk management as a discipline.
Introduction

Ellen Davis

OpRisk & Compliance

PART I: WHERE IS OPERATIONAL RISK TODAY?

1 Operational Risk Management - The View from the Trenches

Angus Grandfield

JPMorgan

2 The Advanced Measurement Approach - Finishing It

Jeremy Quick

Guernsey Financial Services Commission

3 Consistent Quantitative Operational Risk Measurement and

Regulation: Challenges of Model Specification, Data Collection

and Loss Reporting

Andreas A. Jobst

International Monetary Fund, Monetary and Capital Markets

Department

PART II: EXTRACTING VALUE FROM THE AMA

4 Challenges in AMA Implementation: Finding a Balance

Between Regulatory and Internal Requirements

Karsten Stickelmann

Deutsche Bundesbank

5 How to Create Value from Loss Data Pooling

Johannes Voit

Deutscher Sparkassen- und Giroverband

6 Beyond Regulatory Compliance - Deriving Value from

Operational Risk Data

Alfred Seivold

Federal Deposit Insurance Corporation

7 Driving an Effective and Efficient Control Self-assessment

Programme

Lim Him Chuan

DBS Bank Ltd

PART III: OPERATIONAL RISK AND THE ENTERPRISE

8 Creating Value in ORM - a Business Line Perspective

Mike Haubenstock

SunTrust Mortgage

9 Implementing a Practical ORM System in the Context of ERM

in an Era of Financial and Regulatory Convergence via Business

Process Governance

Guan Seng Khoo

Standard Chartered Bank

10 Delivering Value through Business Continuity Management

Peter Poulos

Morgan Stanley

11 Operational Risk in Enterprise Risk Management

Andrew Brand, Mustafa Cavus

Threadneedle AssetManagement

PART IV: UNLOCKING THE POTENTIAL OF EFFECTIVE CULTURE

AND GOVERNANCE

12 Op Risk Governance: Sustaining the Importance of Operational

Risk Management

Ashish Dev

Promontory Financial

13 Operational Risk and Communication Conduits

Eric Holmquist

Advanta Bank Corp.

14 The Role of Reputation Risk in ORM

Ladd Muzzy

Ernst & Young LLP

15 Leveraging Information Technology Governance for

Operational Risk Management

Ramakrishnan S. Kannan

i-flex Consulting
Ellen Davis

Ellen Davis is the head of risk insight in Thomson Reuters’ governance, risk and compliance division and is based in London. Previously she spent 14 years at Incisive Media, where she worked with a cross-company team to shape the online editorial presence of the division that publishes Risk magazine, as divisional online editor. Prior to this she was the editor and publisher of Operational Risk & Regulation magazine, and editor of AsiaRisk magazine based in Hong Kong. Originally from the US, she holds an MBA from NYU’s Stern School of Business and she wrote about capital markets, corporate finance, and emerging markets for various publications while living in New York City during the 1990s. Ellen continues to enjoy discussing the risk management challenges facing individuals, organisations, and regulators around the world.