As part of the research for this book, a series of in-depth inter-
views were conducted with practitioners from within the financial
markets industry. The interviews focused on the current organiza-
tional structures, people, processes and technology within the
operations functions. During the discussions, the interviewees
were encouraged to outline their organization’s policies to risk
management in general and operational risk in particular.
The interviews were conducted with senior personnel within the
organizations who either had responsibility for the operations
area or were responsible for operational risk management. A
market supervision and compliance manager from a futures and
options exchange in London was interviewed to provide an
exchange perspective on its own operational risk management as
well as its responsibility to ensure the correct market operation
through member audits and inspections. Additionally, informa-
tion systems suppliers and management consultancies were inter-
viewed.
The financial institutions selected for the research ranged from
small brokers who traded only in London to large and diverse
investment banks that traded in all the major financial centres.
The operations varied from small administrative functions that
provided support for the house traders to large multi-functional
departments that were set up as profit centres to provide full clear-
ing and settlement services for both client and house trading. The
selected sample of banks included American, European and
Japanese institutions.
As most of the institutions insisted on anonymity as a precondi-
Operational risk survey
carried out for this book
5

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