5 Questions
What is the definition of operational risk according to the Basel Committee?
The risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events.
What are some examples of operational risks relating to internal processes?
Inadequate procedures and controls for reporting, monitoring and decision-making; Inadequate procedures on processing information, such as errors in booking transactions and failure to scrutinize legal documentation; Organizational deficiencies; Risk surveillance and excess limits: management deficiencies in risk monitoring, such as not providing the right incentives to report risks, or not abiding by the procedures and policies in force; Errors in the recording process of transactions; The technical deficiencies of the information system or the risk measures.
What are the potential sources of operational risk?
Inadequate or failed internal processes, people and systems; External events.
What are some examples of external events that can cause operational risk?
External events such as natural disasters, political unrest, or cyber attacks.
What are some examples of organizational deficiencies that can lead to operational risk?
Organizational deficiencies can include poor management practices, lack of training, or ineffective communication channels.
Test your knowledge on operational risk and internal processes with this quiz! Learn about the Basel Committee's definition of operational risk and explore the various events related to inadequate procedures and controls. Challenge yourself and enhance your understanding of operational risk management.
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