Operational Risk: Measurement and Modelling Hardcover - 2001

HASH(0x110d2180)

Risk to firms is increasing and can't be avoided. Dealing with this increased risk is essential to financial institutions and the whole economy.
"The rapid pace of technological advancement and financial innovation has introduced new, highly complex elements of risk."
- William McDonough, Chairman,
Bank for International Settlements,
20 September 2000
"The redistribution of risk induces more investment in real assets and hence engenders higher standards of living."
- Alan Greenspan, Chairman
US Federal Reserve, 14 October 1999
Recently a large focus of regulatory attention has been on what is known as operational risk. Operational risk is concerned with the risk to the firm's performance due to how the firm is operated as opposed to how the firm is financed.
"Operational risk is a topic which...for the great majority of banks now concerns them as much as credit or market risk. It is a topic to which they will be devoting greater resources and attention over the next few years."
- Tim Sweeney, Director General, British Bankers Association, 1998
The general concensus is that much can be done to avoid future disasters by taking a systematic approach to reducing the risk in current operations, but the challenge is finding a way to identify the causes of operational risk and measuring their potential impact on the earnings of the firm. This major work by a leading expert in operational risk measurement puts forth a cradle-to-grave hands-on approach that concentrates on measurement of risk in order to provide the needed feedback for its managment and mitigation.
Operational Risk: Measurement and Modelling represents a new approach to increasing the value of the firm by providing a way to measure operational risk and enabling firms to better control the variability or risk of earnings in their operations. It is an enlightening introduction to a new way of looking at the operations of a business, and the theoretical foundations ensure that the methodologies will be generally applicable and stable over time.