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The Operational Risk Management Process: Implementation of an OR Management Model
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In the last decades, operational risk (OR) management has advanced to become an integral part of financial and other institutions'
overall risk management processes. It is especially important for those institutions where OR events manifest as high-severity / lowfrequency
events causing significant distress on the company's operations. Within the Internal Capital Adequacy Assessment Process
(ICAAP) required by Basel II, financial institutions must develop and use internal risk assessment and management information
systems to efficiently assess their economic capital requirement. This approach can also be used for the efficient management of
operational risk.
In the paper we describe the key steps in building such a system, starting from OR management strategy, methodology and policies,
which are incoporated into the overall risk management strategy and processes. We follow by describing the key elements of the OR
database - the most important part of the system. We continue by describing the analytical potential of the system, including
monitoring, reporting, scenario analysis and back-testing. We finally highlight the possibilities of using the system in non-financial
companies, especially in the fields of high-technology and IT.
dr. Aleksandra Brdar Turk - Personal Name
NONE
The Operational Risk Management Process: Implementation of an OR Management Model
Management
English
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