Operational Risk Management

Preface

This book presents in 20 chapters everything I know in operational risk. Everything I have learnt since becoming involved in operational risk management in 2001 and from my previous experience as an internal auditor. Everything I retained from hearing, reading, observing, teaching, researching and consulting in risk is distilled in this book, to present the most current overview of practices of operational risk management in the financial services industry. You will see many case studies and other examples that highlight the good, the best or sometimes the poor practices in non‐financial risk management. The book presents some of the more mature developments in risk management, like managing risks interdependencies and adopting a single framework. Finally, I like to insist on the benefits of positive risk management, where lessons are learnt from successes and positive outliers just as much as from failures, and where risk management is used as an enabler of performance rather than the avoidance of downside.

The book is the result of two fortuitous events as well as 17 years of work in the discipline. The first event was a tragedy in 2001 that left open the rather new function of operational risk management for ING South West Europe. I applied for the job and was appointed. I am extremely grateful to Jean‐Pierre Straet, then General Risk Manager, and Tamar Joulia, General Credit Risk Manager, for releasing me (part‐time) from my credit risk responsibilities so I could ...