Operational Risk Manager's Guide, The

Tools and Techniques of the Trade

Publication Date	February 2007
Publisher	Risk Books
Product Type	Book
Pages	108
ISBN Number	9781904339755
Product Code	RIS00364

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£249.00
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Summary

With over 10 years' experience, Sergio Scandizzo, one of the most knowledgeable operational risk professionals in the business, highlights the requisite set of skills and competencies that a successful operational risk manager must possess and discusses the key requirements of the role, including:

how to write an operational risk policy
developing strong working relationships with senior management, front and back office staff, IT, compliance and audit professionals
advising management on the identification and mitigation of operational risks
embedding a culture of risk management throughout the business
developing, maintaining and reviewing a risk management framework

Written exclusively from the perspective of an operational risk manager, the focus of this report is always on describing practical ways to get the job done, backed up with real-life examples of everything that is discussed. It provides you with a solid understanding of the tools and techniques of identifying, managing, reporting and monitoring operational risk.

The report looks at current developments affecting the role of the op risk manager including Basel II, capital measurement and allocation, and concluding with an assessment of how the op risk manager's role is likely to evolve within the next 15 years.

This concise, practical report talks to practitioners in their own language with plenty of identifiable examples of day-to-day scenarios. This is essential reading not only for operational risk managers and analysts but also management consultants, internal and external auditors and compliance officers looking to move into this area or needing to learn more about the op risk manager's role.

Content

Acknowledgements
Author Biography
List of Figures and Tables
Prologue: The Job Interview
Part I: The Job Description
- 1 A Day in The Life
  - 9:00 am: Key risk indicators
  - 10:00 am: Meeting with internal audit
  - 11:00 am: Briefing with the CRO
  - Incident in FX management
  - Percentage of exotic transactions in derivative portfolio
  - 12:00 pm: Videoconference with subsidiary's operational risk manager
  - 14:00 pm: Message from the supervisors
  - 16:00 pm: Study on third-party liability
  - 17:00 pm: Presentation to commercial banking unit
  - 18:00 pm: New product approval
  - Conclusion
- 2 The Operational Risk Function
  - Do I have to manage anything?
  - Operational risk and internal Audit
  - Operational risk and compliance
  - Operational risk and business continuity
  - You can do everything, but you cannot do it alone
  - Are you "adding value"?
  - Why manage operational risk?
  - Nobody expects the Spanish inquisition
  - Options and the law of requisite variety
Part Ii: Tools of The Trade: Life under Basel Ii
- 3 Risk Management for Beginners: The Operational Risk Policy
  - Definition
  - Operational risk
  - Operational event
  - Operational loss
  - Key risk indicator
  - Operational risk management framework
  - Risk appetite
  - Roles and responsibilities
  - Board of directors
  - Senior management
  - Operational risk function
  - Internal audit
  - Compliance
  - Operational risk committee
  - New product approval
  - Operational risk management framework
  - Risk identification
  - Risk assessment
  - Risk monitoring and reporting
  - Risk control and mitigation
  - References
- 4 Risk Identification
  - Introduction
  - Objectives of risk identification
  - A methodology for risk identification and mapping
  - Case studies
  - Conclusions
  - Acknowledgements
  - References
- 5 Risk Assessment and Capital Allocation
  - Risk measurement and capital allocation
  - The Basel II approaches to operational risk measurement
  - Basic indicator approach
  - Standardised approach
  - Advanced measurement approaches (AMA)
  - General standards
  - Qualitative standards
  - Quantitative standards
  - Advanced measurement approaches (AMA)
  - Scenario analysis
  - Probability assessment
  - Impact assessment
  - Historical data
  - Business and control environment - KRIs and scorecards
  - Acknowledgements
  - References
- 6 Reporting
  - Reporting operational events and losses
  - Reporting results of self-assessment
  - Reporting KRIs: the operational risk scorecard
  - Reporting for top management
  - What
  - When
  - How
  - Lightness
  - Quickness
  - Exactitude
  - Visibility
  - Multiplicity
  - Consistency
  - References
Part Iii: Special Topics in Calamity Physics
- 7 The Management of Extreme Risks
  - The meaning of strategy
  - Risk definitions
  - High severity events
  - Scenario analysis for extreme events
  - References
- 8 Financial and Other Disasters
  - Three case studies
  - Scenario 1 - Lending and investment banking
  - Scenario 2 - Trading
  - Scenario 3 - Trading, continued
  - Thinking the unthinkable
  - References