In response to the growing demand for introductory material (from both professionals and academics), the authors - senior practitioners from KPMG Germany - have combined their many years of experience, gained in operational risk departments of leading banks, to produce this insightful primer to operational risk.
An Introduction to Operational Risk provides an overview of the current state of this discipline, with clear explanations of industry terminology. In addition, you are directed step-by-step through the structure and processes that leading international banks currently follow to manage and control operational risk. What's more, you are presented with pragmatic and workable approaches to solving all the common operational risk-related problems that can occur.
It will enable you to put into practice the following key elements of operational risk:
• Framework
• Definitions and structures
• Loss data
• Risk assessment
• Key indicators
• Management information system
• Economic and regulatory
capital
• Risk information technology
Furthermore, the timing of the book has allowed the opportunity to incorporate the contents and implications of the new Capital Accord of the Basel Committee on Banking Supervision (Basel II) as well as the EU Commission's Capital Requirements Directive (CRD).

An Introduction to Operational Risk is an essential guide for junior operational risk professionals; and experienced staff who have recently changed their focus to operational risk; to implement the appropriate processes and methods in financial institutions. It will also support and stimulate urgently needed academic debate on this topic.

Contents

Preface

Table of Figures

List of Tables

1: Introduction
2: Drivers for Operational Risk Management
Business drivers
Regulatory environment
3: Operational Risk in the Context of All Risk Types
4: Steps in the Process of Managing Operational Risk
Identification
Assessment
Reporting
Management
Monitoring
5: The Components of Operational Risk Management
Framework
Definitions and structures
Loss data
Risk assessment
Key indicators of risk
Management information system
Economic and regulatory capital
Risk Information Technology
6: Implementation of the Framework Components and Management Process
Approach
Manpower and time involved
Implementation problems
7: Outlook

References

Thomas Kaiser is a director with KPMG Germany in the Financial Risk Management area and heads its Operational Risk practice. In addition to that, he is a lecturer on Operational Risk at Frankfurt University. Before joining KPMG, he worked in the risk management departments of three major German banks, focusing on Operational Risk.

Marc Felix Köhne is a partner with KPMG Germany in the Management Assurance Services area. He is responsible for the Global Operational Risk competence team. Before joining KPMG he worked in derivatives trading as well as Operational Risk management of a major German bank.