Risk Management in Finance

6.

Operational Risk

6.1.

Sources of Operational Risk

6.1.1.

6.1.1.1.

6.1.1.2.

6.1.1.3.

6.1.1.4.

Unauthorized Trading

6.1.1.5.

Key Person Risk

6.1.2.

6.1.2.1.

Failed Internal Processes

6.1.2.2.

Inadequate Procedures

6.1.2.3.

Settlement Failures

6.1.2.4.

Documentation Risk

6.1.3.

6.1.3.1.

Technology Failure

6.1.3.2.

6.1.3.3.

6.1.3.4.

System Integration Risk

6.1.4.

External Events

6.1.4.1.

Natural Disasters

6.1.4.2.

Political Instability

6.1.4.3.

6.1.4.4.

6.1.4.5.

6.2.

Measuring and Managing Operational Risk

6.2.1.

Loss Data Collection and Analysis

6.2.1.1.

Internal Loss Data

6.2.1.2.

External Loss Data

6.2.1.3.

Loss Event Categories

6.2.2.

Risk and Control Self-Assessment (RCSA)

6.2.2.1.

Process Mapping

6.2.2.2.

Control Identification

6.2.2.3.

Control Testing

6.2.3.

Key Risk Indicators (KRIs)

6.2.3.1.

Selection and Monitoring

6.2.3.2.

Threshold Setting

6.2.3.3.

Escalation Procedures

6.2.4.

Business Continuity Planning (BCP)

6.2.4.1.

Disaster Recovery Planning

6.2.4.2.

Crisis Management

6.2.4.3.

Business Impact Analysis

6.2.5.

Internal Controls and Audits

6.2.5.1.

Control Design and Implementation

6.2.5.2.

Internal Audit Function

6.2.5.3.

Control Testing

6.2.6.

Operational Risk Capital

6.2.6.1.

Basic Indicator Approach

6.2.6.2.

Standardized Approach

6.2.6.3.

Advanced Measurement Approach

6.2.7.

Insurance and Risk Transfer

6.2.7.1.

Professional Indemnity Insurance

6.2.7.2.

Cyber Insurance

6.2.7.3.

Directors and Officers Insurance

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