Clearing and Settlement of Derivatives

• The level of management needed

• The scope to absorb additional workload and/or delays to the

processing.

From the above, it can be seen that some kind of operational risk

measurement is possible; and that it should be continuous. We can

choose not to measure, even crudely, the risk on the basis that it

may never create a major problem but then you could leave your

house unlocked all day and never get burgled!

Summary

Operational risk is highly relevant to derivatives, and derivatives

clearing and settlement. Sources of risk must be identified and in

conjunction with the firm’s overall risk management ...