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Operational risk management based: Evaluating cost and operating efficiency at bank branches - Thesis Proposal Example

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These approaches and their adaptation by banks have evolved overtime commanding a much needed attention. Ensuring operational risks are well managed will have tremendous impact on operational efficiency…
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Operational risk management based: Evaluating cost and operating efficiency at bank branches
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Download file to see previous pages For most financial institutions, the business of risk management and reallocation remains a nuisance; complicated risk management systems are being deployed in various bank branches to carry out these tasks. The basic components of a risk management system includes identifying and defining the risks the firm is exposed to, assessing their magnitude, mitigating them using a variety of procedures, and setting aside capital for potential losses. Economic modeling is used well in achieving these. The development of empirical models of financial precariousness lead to increased modeling of market risk COMMA which is the risk arising from fluctuations of financial asset pricing. Concerning credit risk, models have recently been developed for large scale credit risk management purposes. Categorizing and modeling of risk has some complications and sometimes they do not cover all aspects of the business, for instance, in modeling risk associated with transactions, we will usually not put into consideration electrical failure, employee fraud, natural disasters and risks of such nature. Operational risk modeling creates arrays for such unforeseen events. The current status of operational risk management by financial institutions nurtures a lot of arguments and uncertainties, explorations on the subject tenders the complexities associated with it. More concrete solutions to risk management have been formulated through the contribution of the (BCBS) Basel Committee on Banking Supervision....
nagement from an operational excellence perspective and part of an integrated performance platform; COMMA going beyond Basel II and using ORM as a transformational dais. Operational risk was understood to be, all types of unquantifiable risk encountered in banking transactions, on a broader and more dynamic stage COMMA however, as reported by BCBS (September 2001), operational risk can be defined as the risk of monetary losses resulting from inadequate or failed internal processes, people, and systems or from external events. External events circulate on natural disasters, that damages a firm's physical assets or electrical or telecommunications failures that disrupt business;COMMA WHICH ARE relatively easier to define than losses from internal problems. To create a better understanding of the precepts, it is important to revisit the underlying principles that delineates ORM. Operational Risk Capital Framework The IS THIS A PROPER NAME OF A GROUP? Committee is proposing to encompass explicitly risks other than credit and market in the New Basel Capital Accord. This proposal reflects the Committee's interest in making the New Basel Capital Accord more risk sensitive and the realization that risks other than credit and market can be substantial. Further, developing banking practices such as securitization, outsourcing, specialized processing operations and reliance on rapidly evolving technology and complex financial products and strategies suggest that these other risks are increasingly important factors to be reflected in credible capital assessments by both supervisors and banks. Under the 1988 Accord, the Committee recognizes that the capital buffer related to credit risk implicitly covers other I KNOW THIS WORD IS IMPORTANT, BUT IT COMES UP AN AWFUL LOT, IS THERE ...Download file to see next pagesRead More
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