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Mastering Operational Risk, 2nd Edition by John Thirlwell, Tony Blunden

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6

Events and losses

Introduction

What is meant by an event

Data attributes

Who reports the data?

Reporting threshold

Use of events

External loss databases

Using major events

Timeliness of data

Summary

INTRODUCTION

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 ...

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