Written for finance professionals working in analysis, trading, and regulation, and financial students needing an overview of current thinking, Operational Risk: Regulation, Analysis and Management provides a clear and timely treatment



The exposure to operational risk is a substantial and growing concern, due to the:

* Greater use of more highly automated technology

* Growth of e-commerce

* Large-scale mergers and acquisitions that test the viability of newly integrated systems

* Emergence of banks as very large-volume service providers

* Increased prevalence of outsourcing

* Greater use of financing techniques that reduce credit and market risk, but that create increased operational risk



Contents



PART I: REGULATION



The Three Pillars of Operational Risk Regulation Ralph Nash, Formerly on the Secretariat of the Basel Committee, now Group Risk, Royal Bank of Scotland, London

A Qualitative Operational Risk Framework: Guidance, Structure, & Reporting Ken Swenson, Federal Reserve Bank of Chicago

Measurement of Operational Risk: The Basel Approach Victor Dowd, FSA,London

A Constructive Review of Basel's Proposals on Operational Risk Jacques Pezier, ISMA Centre, University of Reading, UK

Regulation of Legal Risks and Fraud: Capital Charges, Control and Insurance Christos Hadjiemmanuil, London School of Economics, UK

Operational Risk and Insurance Thomas Leddy, Swiss-Re, Zurich





PART II: ANALYSIS



Statistical Models of Operational Loss Carol Alexander, ISMA Centre, University of Reading, UK

The Loss Distribution Approach Michael Haubenstock, Capital One Bank,Virginia and Lloyd Hardin, OpVantage, Fitch Risk Management, NY

A General Simulation Framework for Operational Loss Distributions Diane Reynolds and David Syer Algorithmics, UK Ltd

The Path to Operational Risk Economic Capital Ulrich Anders, Dresdner Bank London





PART III: MANAGEMENT



Scorecard Approaches Tony Blunden, Ernst and Young, London

Developing an Operational Risk Management Framework Michael Haubenstock, Capital One Bank, Virginia, USA

Using Operational Risk Modelling to Manage Operational Risk Tony Peccia, Bank of Montreal, Toronto, Canada

Managing Operational Risks with Bayesian Networks Carol Alexander, ISMA Centre, University of Reading, UK

Operational Risk Management Jacques Pezier, ISMA Centre, University of Reading, UK



Authors from the following organizations, each closely involved in the development of operational risk best practice, examine in detail the areas of regulation, measurement and management:

* the Secretariat of the Basel Committee

* the FSA

* the Federal Reserve Bank of Chicago

* the ISMA Centre

* London School of Economics

* Swiss-Re

* Capital One Bank

* Algorithmics

* Dresdner Bank

* Ernst and Young.