
FREQUENCY
LOW IMPACT
(LI)
HIGH IMPACT
(HI)
HIGH
FREQUENCY
EVENTS
(HFE)
LOW
FREQUENCY
EVENTS
(HFE)
T
MANY
BUT
RATHER
MINOR
FEW, BUT
MAJOR OR
CATASTROPHIC
HFE/LI
LFE/HI
168 Operational Risk Control
These will become very interesting studies giving the financial institutions that
undertake them a competitive edge. For the time being, however, the priority is to
establish a firm basis for data collection and for frequency-and-impact studies which
permit analysis of real life events, like operational risk, by means of increasingly more
powerful mathematical tools. This brings into the picture the issue of system design,
which is the subject of section 8.4.
8.3 Characteristics ...