Events and losses
Events and losses are a fundamental part of operational risk management. They are a clear and explicit signal that an operational risk has occurred. This may be due to the failure of a control, the lack of a control or simply a very unusual event that was not foreseen.
As shown in Figure 6.1, events are one of the three fundamental processes of operational risk management. They provide a valuable objective challenge to the subjective nature of risk and control assessments. They are also often used as indicators of risks and controls ...