4

Operational risk appetite

Risk appetite and control appetite

Risk appetite

Control appetite

RISK APPETITE AND CONTROL APPETITE

It is of course of fundamental importance that a firm’s operational risk appetite is identified and its dealings are then monitored against that appetite. A large part of this chapter is about operational risk appetite. However in the latter part of the chapter, we look at how operational risk appetite is partly composed of an appetite for the quality of the controls that mitigate the operational risks to which a firm is subject. By breaking down operational risk appetite into its component parts, we are able to delve further and deeper into a practical approach to operational risk appetite.

RISK APPETITE

Defining ...

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