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OPERATIONAL RISK– this is any risk that is neither credit risk nor market…

- - - -  Resource requirements such as people, systems and other assets, and arrangements for obtaining these resources
      -  The recovery priorities for the firm's operations
      -  Communication arrangements for internal and external concerned parties (including the PRA, FCA,clients and the press)
      -  Escalation and invocation plans that outline the processes for implementing the business continuity plans, together with relevant contact information
      -  Processes to validate the integrity of information affected by the disruption
      -  Regular testing of the business continuity policy in an appropriate and proportionate manner
    - -  Principle 1 emphasises that the requirement for sound business continuity management applies to all financial industry participants and that the ultimate responsibility for business continuity management – not unlike the management of other risks – rests with an organisation's board of directors and senior management.
      -  Principle 2 advises organisations that they should explicitly consider and plan for major operational disruptions. While this concept may be new for many organisations, it is considered important in light of the increasing frequency of such events.
      -  Principle 3 states that financial industry participants should develop recovery objectives that reflect the risk they represent to the operation of the financial system. Financial industry participants that provide critical services to, or otherwise present significant risk to the operation of, the financial system should target higher standards in their business continuity management than other participants.
      -  Principle 4 stresses the critical importance of business continuity plans addressing the full range of internal and external communication issues an organisation may encounter in the event of a major operational disruption. The principle specifically recognises that clear, regular communication during a major operational disruption is necessary to manage a crisis and maintain public confidence.
      -  Principle 5 highlights the special case of cross-border communications during a major operational disruption. Given the deepening interdependencies of financial systems across national boundaries, this principle advises financial industry participants and financial authorities to adopt communication protocols that address situations where cross-border communication may be necessary.
      -  Principle 6 emphasises the need to ensure that business continuity plans are effective and to identify necessary modifications through periodic testing.
      -  Finally,Principle 7 calls upon financial authorities to incorporate business continuity management reviews into their frameworks for assessing financial industry participants.