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Operational Risk (operational risk losses by banks, (Clients, products,…

- - - - Staff turnover
      - Number of failed transactions
      - Number of positions filled by temps
      - Ratio of supervisors to staff
      - Number of open positions
      - Percentage of staff that did not take 10 days consecutive leave in the last 12 months
- - - - No reputation risk and
        the risk resulting from strategic decisions.
- - - - operational risk management function
      - keep track of relevant losses
      - regular reporting of operational risk losses
      - operational risk management system must be well documented
      - operational risk management processes and assessment system must be subject to regular independent reviews by internal auditors.
    - - External data
        
        data consortia
        
        sharing of data between banks
        
        data vendors
        
        business of collecting
        publicly available data
      - Scenario analysis
        
        generate scenarios covering the full range of possible LFHSLs
      - Internal data
        
        high-frequency low-severity losses
        (HFLSLs)
        
        credit card fraud losses
        
        low-frequency high-severity losses (LFHSLs)
        
        rogue trader losses
        
        focus on it
      - Business environment and Internal control factors (BEICFs)
        
        complexity of the business line
        
        technology
        
        pace of change
        
        the level of supervision and more
    - - Loss Severity
        
        distribution of the size of a loss
        
        lognormal probability distribution
      - Loss Frequency
        
        distribution of the number of losses observed during one year
        
        Poisson distribution.
  - - - trading and sales
      - retail banking
      - corporate finance
      - commercial banking
      - payment and settlement,
      - agency services
      - asset
        management
      - retail brokerage