The Necessity of Operational Risk Management and Quantification
Year: 2008
Type: article
Abstract: Beginning with the fact that performant strategies of the financial institutions have programmes and management procedures for the banking risks, which have as main objective to minimize the probability of risk generation and the bank’s potential exposure, this paper wants to present the operational risk management and quantification methods. Also it presents the modality of minimum capital requirement for the operational risk. Therefore, the first part presents the conceptual approach of the operational risks through the point of view of the financial institutions exposed to this type of risk. The second part describes the management and evaluation methods for the operational risk. The final part of this article presents the approach assumed by a financial institution with a precise purpose: the quantification of the minimum capital requirements of the operational risk. Key words: Operational risk, operational risk profile, standard approach, gross income, administrative general expenses Operational risk conceptual approach In the last period of time the changes that took place on the financial market, because of the development of new activities and implementation of new products, generate new types of risks, more complex and bigger. A recent category is represented by the relative operational risk, for which the Basel Committee
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1574229727