Chapter 6 - Operational risks
This is a chapter from the Bloomsbury Professional book Managing Risk in Financial Firms 2nd Edition, which provides a detailed analysis of the types of risk that financial institutions may face and offers authoritative and comprehensive advice on putting in place measures to minimise exposure to risk. This book explains why there is significantly more to risk management than the now discredited VAR modelling techniques and describes a range of effective risk management methods to address various types of risk. It is essential reading for all those working within a financial institution who have no risk measurement expertise but who are inevitably involved in the risk management function of that institution. This reworked and revised second edition examines risks associated with the market and liquidity risk; risks arising from counterparties (including customer issues such as unfair contract terms and best execution); and risks which may be found closer to home, such as operational and legal and regulatory risk, including insolvency.