Managing Operational Risk in Financial Markets

Book description

Risk Management is one of the biggest issues facing the financial markets today. 'Managing Operational Risk in Financial Markets' outlines the major issues for risk management and focuses on operational risk as a key activity in managing risk on an enterprise-wide basis.

While risk management had always been an integral part of financial activity, the 1990s has seen the requirement for risk management establish itself as a key function within banks and other financial institutions. With greater emphasis on ensuring that money is not lost through adverse market conditions, counterparty failure or inappropriate controls, systems or people, risk management has become a discipline in its own right. Managing risk is now THE paramount topic within the financial sector. Recurring major losses through the 1990s has shocked financial institutions into placing much greater emphasis on risk management and controls. The collapse of Barings and losses made by Metallgescellschaft, Orange County, Diawa and Sumitomo as a result of a lack of procedures, systems or managerial control has demonstrated to organisations the need to broaden the scope of their risk management activity from merely looking at market and credit risk. This has brought into focus the need for managing operational risk. Operational risk can only be managed on an enterprise wide basis as it includes the entire process of policies, culture, procedures, expertise and systems that an institution needs in order to manage all the risks resulting from its financial transactions. In fact, in order to effectively manage market and credit risks it is necessary to have the relevant skills and expertise in the staff, technical and organisational infrastructure, as well as monitoring and control systems. As all of these are components of operational risk, it then becomes apparent that an integrated risk management approach needs to focus on operational risk.

Provides a comprehensive framework for the management of operational risk
Defines the spectrum of risks faced by organisations and how they can effectively manage these
Develops an enterprise-wide risk information system and defines the major challenges that need to be addressed in developing such a system

Table of contents

  1. Front Cover
  2. Managing Operational Risk in Financial Markets
  3. Copyright Page
  4. Contents (1/2)
  5. Contents (2/2)
  6. Acknowledgements
  7. Chapter 1. Introduction (1/2)
  8. Chapter 1. Introduction (2/2)
  9. Chapter 2. Financial Losses Over the Past Few Years
    1. Collapse of Barings (1/2)
    2. Collapse of Barings (2/2)
  10. Chapter 3. Requirement for Risk Management
    1. Derivatives and risk management
  11. Chapter 4. Introduction to Derivatives
    1. Development of the derivatives industry
    2. Understanding derivatives products (1/3)
    3. Understanding derivatives products (2/3)
    4. Understanding derivatives products (3/3)
    5. Understanding the market structures (1/2)
    6. Understanding the market structures (2/2)
    7. Clearing members and their clients
    8. OTC derivatives clearing and settlement process
    9. Transaction processing and settlement for OTC instruments (1/2)
    10. Transaction processing and settlement for OTC instruments (2/2)
  12. Chapter 5. Operational Risk Survey Carried Out for This Book
    1. Results of the market survey
    2. Operational risk parameters identified during the survey
    3. Organizational structure identified during the survey (1/3)
    4. Organizational structure identified during the survey (2/3)
    5. Organizational structure identified during the survey (3/3)
    6. 1997 Operational Risk Management Survey
    7. Operations cultural model
  13. Chapter 6. Risk Spectrum
    1. No unique risks to users of derivatives
    2. Risk categories (1/3)
    3. Risk categories (2/3)
    4. Risk categories (3/3)
  14. Chapter 7. Managing Operational Risk
    1. Introduction
    2. Why manage operational risk?
    3. Measuring operational risk
    4. G-30 and Basle Committee reports on risk management
    5. Risk management framework
    6. The role of senior management
    7. Risk management culture (1/2)
    8. Risk management culture (2/2)
    9. Enterprise-wide co-ordination
    10. Managing organizational paradoxes
    11. Toward a more flexible organization
  15. Chapter 8. Business Process Reengineering
    1. Benefits of BPR
    2. BPR processes
    3. Case study – ABC Futures (1/3)
    4. Case study – ABC Futures (2/3)
    5. Case study – ABC Futures (3/3)
  16. Chapter 9. The Learning Organization
    1. Why become a learning organization?
    2. Creating a learning organization
    3. Barriers to learning
    4. Knowledge management (1/2)
    5. Knowledge management (2/2)
  17. Chapter 10. Change Management
    1. Introduction
    2. Resistance to change
    3. Force field analysis
    4. Developing commitment
    5. Framework for managing major change
  18. Chapter 11. New Role for Operations
  19. Chapter 12. Enterprise-Wide Risk Management
    1. The role of technology
    2. Enterprise-wide risk information systems (1/2)
    3. Enterprise-wide risk information systems (2/2)
    4. Challenges to enterprise-wide risk management
    5. Build or buy? (1/2)
    6. Build or buy? (2/2)
  20. Chapter 13. Project Management for an Enterprise-Wide Risk Management System
    1. Technology risk
    2. Scheduling risk
    3. Financial risk
    4. Supplier risk
    5. Infrastructure risk
    6. Business control and security risk
    7. Project management framework
  21. Chapter 14. Operational Risk Model
    1. Operational risk management cycles
    2. Risk environment
    3. Risk management and control (1/2)
    4. Risk management and control (2/2)
  22. Chapter 15. Conclusions
  23. Glossary (1/5)
  24. Glossary (2/5)
  25. Glossary (3/5)
  26. Glossary (4/5)
  27. Glossary (5/5)
  28. Appendix 1. Exchange Codes
  29. Appendix 2. Operational Risk Management (1/3)
  30. Appendix 2. Operational Risk Management (2/3)
  31. Appendix 2. Operational Risk Management (3/3)
  32. Bibliography (1/2)
  33. Bibliography (2/2)
  34. Index (1/2)
  35. Index (2/2)

Product information

  • Title: Managing Operational Risk in Financial Markets
  • Author(s): Amanat Hussain
  • Release date: June 2000
  • Publisher(s): Butterworth-Heinemann
  • ISBN: 9780080491745