CHAPTER 2

Frontiers of Operational Risk Management

Ralph Nash

Barclays Business Banking

Ioanna Panayiotidou

Axa UK

Introduction: What Is Operational Risk Management?

The emergence of operational risk management as a separate discipline is somewhat murky. Its origins can be traced to a mixture of “operating risk” (back-office operations, payment systems), audit-style risk assessment, and specific risk management capability (business continuity planning (CBCP), fraud risk management). Several financial institutions started using the term in the 1990s, but it was given a huge impetus by the emergence of capital requirements for this nebulous group of risks under Basel II and subsequent EU legislation. Even under Basel II, however, the term ...

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