Operational Risk Management -- Copyright -- Contents -- Preface -- Part 1: Operational Risk in the Banking Industry -- 1: Overview and Definition -- Learning Objectives -- Introduction -- What is Operational Risk? -- Operational Risk in Financial Institutions -- Causal Factors -- Categories -- Important Operational Risk Events -- Linked Events -- Legal Events -- Tax Events -- Distinguished From Other Risks -- Determining Risk Positions -- Distinguished From Operations Risk -- Back Office Operations -- Enterprise-wide Operational Issues -- Boundaries of Operational Risk -- Drivers of Operational Risk Management -- Integrating Related Disciplines -- Financial Risk Management -- Audit and Internal Controls -- Reliability Engineering -- Summary -- Key Terms -- Study Guide -- Further Reading -- 2: Operational Risk Management Frameworks -- Learning Objectives -- Introduction -- Operational Risk Management Frameworks -- Operational Risk Management Process -- ORM Frameworks and Goals -- Summary -- Key Terms -- Study Guide -- Further Reading -- 3: Case Studies -- Learning Objectives -- Introduction -- Categories of Operational Risk -- Process: Safety Deposit Boxes at DBS -- People: Société Générale Taken to the Brink -- System: The Tokyo Market Crash -- External: World Trade Center Blast -- Lessons in ORM -- Summary -- Key Terms -- Study Guide -- Further Reading -- Part 2: Operational Risk Planning -- 4: Methods and Tools -- Learning Objectives -- Introduction -- The ORM Process -- Identifying Risk -- Risk Factors -- Loss Events -- Risk and Control Self-Assessment (RCSA) -- Key Risk Indicators (KRI) -- ILD Building -- Managing Operational Risk -- Risk Management Environment -- Summary -- Key Terms -- Study Guide -- Further Reading -- 5: Risk Identification -- Learning Objectives -- Introduction -- Assessing Risk -- Risk and Control Self-Assessment.

Categorising Risk -- Category Types -- Business Line Mapping -- Summary -- Key Terms -- Study Guide -- Further Reading -- 6: Risk Measurement and Assessment -- Learning Objectives -- Introduction -- Impact and Probability -- Historical Analysis -- Subjective Risk Assessment -- Implied From Causal or Statistical Models -- Value-at-Risk -- Loss and Capital Charge -- Loss Distribution Approach -- Quantification Challenges -- Summary -- Key Terms -- Study Guide -- Further Reading -- Part 3: Operational Risk Management -- 7: Risk Control and Mitigation -- Learning Objectives -- Introduction -- Incident Management -- Loss Prediction -- Loss Prevention -- Loss Control -- Loss Reduction -- Assumptions, Avoidance and Transference -- Risk Avoidance -- Risk Assumptions -- Risk Transference -- Insurance -- Alternatives to Insurance -- Internal Controls -- Contingency Planning -- Summary -- Key Terms -- Study Guide -- Further Reading -- 8: Risk Reporting -- Learning Objectives -- Introduction -- Risk Profile -- Reporting -- Key Risk Indicators -- Operational Checklist -- Incidents and Data Reporting -- Escalation -- Summary -- Key Terms -- Study Guide -- Further Reading -- 9: Related Techniques -- Learning Objectives -- Introduction -- Scenario Analysis -- Stress Testing -- Limitations -- Extreme Events -- Operational Risk Models -- Top-Down Risk Models -- Bottom-up Risk Models -- Selecting a Risk Model -- Causal vs Statistical Models -- Summary -- Key Terms -- Study Guide -- Further Reading -- Part 4: Regulatory Approaches to Operational Risk -- 10: Regulatory Requirements -- Learning Objectives -- Introduction -- Basel II -- Pillars I, II, and III -- Basel III -- Evolving Framework -- Basel III and the HKMA -- HKMA Risk-Based Supervisory Approach -- Operational Risk Capital Charge -- Approaches to Assessment -- Basic Indicator Approach -- Standardised Approach.

Advanced Measurement Approach -- Basel III Risk Exposures -- Counterparty Risk -- External Agencies -- Summary -- Key Terms -- Study Guide -- Further Reading -- 11: Risk Governance -- Learning Objectives -- Introduction -- Risk Governance Structure -- Basel Principles -- Elements of a Sound Risk Management System -- Corporate Governance -- Other Considerations -- Specialised Committee -- Internal Control, Compliance, and Audit -- RCSA, KRIs, and Risk Events -- Summary -- Key Terms -- Study Guide -- Further Reading -- Index.