Basel II Operational Risk Management

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While most financial institutions associate operational risk with all business lines including all front office and back office functions, the magnitude and mix of risks vary considerably across businesses.

At present, a universal definition of operational risk is still to be determined. Many financial institutions have defined operational risk as the risk of loss arising from technical or human error, while others have simply defined operational risk as any risk that is not a market or credit risk. A level of commonality is that most financial institutions see a link between credit, market and operational risk.

Events … have shown that (financial) institutions should never let their guard down when it comes to risk management. Even though most of the high-profile losses during the past year have – so far – stemmed from market and credit risks, one should not, therefore, assume that less attention should be paid to operational risk management – Randall S. Kroszner, Professor of Economics, Booth School of Business, University of Chicago, and Former Member of the US Federal Reserve Board of Governors

As banks develop their respective frameworks for managing operational risk, strategies for managing and monitoring operational risk in the context of compliance with Basel II regulations raises some critical issues for financial institutions:

• What would a best practice operational risk management system look like?
• What is a level playing field for regulators to compare one bank’s operational risk management system with another?
• What guidelines and best practices can a financial institution use to allocate capital across its business lines, in such that Basel II’s standards for being integrated into the day-to-day risk management processes of the bank are satisfied?

The Finance 3.0 Basel II Operational Risk Management (ORM) program contains a library of 9 courses designed to equip banking ORM, control, auditing, compliance and IT professionals with the complete scope of strategic, operational and technical knowledge required of operational risk management under the Basel II Accord.

Starting with an overview of the ORM framework components, we go on to cover the risk assessment process, and qualitative and quantitative strategies that support of effective ORM. The courses will also look at management application of ORM, as well as the realization & deployment challenges of ORM.

The 9 courses covered in the Finance 3.0 Basel II ORM program are:

• The Operational Risk Management Framework
• Risk Identification
• Loss Data Collection Methodology
• Risk Self-Assessment
• Key Risk Indicators
• Risk Quantification – 1
• Risk Quantification – 2
• Management Applications
• Realization Challenges and Deployment Strategy

Enrollment into the Finance 3.0 Basel II ORM program also provides you with access to a comprehensive set of worked examples / case studies relating to Risk Inventory, Loss Data Collection, Risk Control Self-Assessment Creation, and KRI Development.

$150 – 12 Month Program – Enroll Now