Managing Operational Risk: New Insights and Lessons Learnt - Risk Books
  • Choose your currency
  • GBP
  • EUR
  • USD

You have no items in your shopping basket.

0 items
£0.00

Managing Operational Risk: New Insights and Lessons Learnt

By Michael Grimwade

Overview

The recent financial crisis has led to unprecedented levels of operational risk losses. In Managing Operational Risk: New Insights and Lessons Learnt, Michael Grimwade, author and head of operational risk for MUFG’s International Securities Businesses, argues that these operational risk losses are readily explicable and could be repeated in the near future.


Managing Operational Risk: New Insights and Lessons Learnt examines the ways in which market and credit risks were transformed into operational risk losses, and how the current actions of both central banks and regulators may be unwittingly sowing the seeds for a new wave of losses.

Publish date: 29 Jul 2016

Availability: In stock

Product Unit Price Qty
eBook - Managing Operational Risk: New Insights and Lessons Learnt
EPUB
£110.00
Book - Managing Operational Risk: New Insights and Lessons Learnt
£145.00
OR

Book description

Managing Operational Risk: New Insights and Lessons Learnt addresses the root causes of the unprecedented operational risk losses suffered after the financial crisis; the new and emerging operational risk threats; and the lessons to be learnt for those working within the sphere of operational risk. Through the use of case studies and analysis of industry trends, Michael Grimwade examines how we can make operational risk management more effective.

The book is structured around the following three questions:

  1. Why did banks suffer such large operational risk losses during the financial crisis?
  2. What is going to cause banks to suffer large operational risk losses again in the future?
  3. What should operational risk managers do differently?

It will answer these questions in three sections: the first analyses the drivers behind a series of large operational risk losses; the second sets out potential future threats by examining existing trends, past patterns, and parallels with other industries; the third looks at how operational risk management frameworks can better equip firms in order to avoid repeating the mistakes of the past.

Chapters include:

  • Three Historical Spikes in Operational Risk Losses
  • First Order Effects: Transforming Credit Defaults and Market Turmoil into Operational Risk Losses
  • Second Order Effects: Transforming Rising Unemployment and Falling Interest Rates into Operational Risk Losses
  • Regulatory Change: The Costs and Consequences
  • Macroeconomic Threats: Tax Issues and Eventually Rising Interest Rates
  • New Technology: Changing Business Models and Risk Profiles
  • Aligning Operational Risk Management Frameworks to Appetites
  • Estimating Exposures to Tail Events
  • Solutions for a Triumvirate of Seemingly Intractable Problems

 

Book details

ISBN
Book - 9781782722861 / eBook - 9781782723059
Publish date
29 Jul 2016
Format
Paperback
Size
155mm x 235mm

Author biography

Michael Grimwade

Michael Grimwade has worked in operational risk management for 20 years. He is currently Head of Operational Risk for MUFG’s International Securities Businesses.

Michael won a scholarship to Oxford to read zoology, and following graduation trained as a chartered accountant, before moving into consultancy, initially working on process improvement projects. Overlaps between the drivers of process inefficiency and operational risk led him to undertake his first operational risk management project in the mid-1990s, when working for what is now PwC Consulting. By the start of the new millennium, however, his disenchantment with the apparent lack of demonstrable commercial value provided by operational risk management prompted a brief return to cost reduction and process improvement. 

Following the finalisation of Basel II in 2004, Michael moved back to operational risk management, initially as Operational Risk Director for Lloyds TSB's Wholesale & International Division, and subsequently as Head of Operational Risk & Compliance for the ~300 RBS and NatWest branches that are currently being spun-off as Williams & Glyn.

Operational risk management continues to evolve as a profession, and Michael has recently focused on sharing good practice via industry seminars, conferences and as a contributor to the Institute of Operational Risk’s ‘Sound Practices Guides’. In 2014, Michael’s efforts were recognised by the Institute, when he received an award for his 'Contribution to the Discipline of Operational Risk Management', primarily for his work on techniques for conducting and validating scenario analysis. In 2015 he was elected to the Board of the Institute, as Director with Portfolio for Regulatory & Industry Bodies.

Michael lives in West London with his wife Karen, his two daughters Charlotte and Olivia, and Cat. Unsurprisingly, his daughters find animals somewhat more interesting than operational risk.

Table of contents

About the Author

Introduction

Part I: What were the Root Causes of the Unprecedented Spike in Operational Risk Losses after the Global Financial Crisis?  

1. Three spikes in Operational Risk losses

2. First-Order effects: Transforming Credit Defaults and Market Turmoil into Operational Risk Losses

3. Second-Order effects: Transforming Rising Unemployment and Falling Interest Rates into Operational Risk Losses

4. Conclusions and Root Causes

Part II: What are the New and Emerging Operational Risk Threats?       

Introduction to Part II: What are the new and emerging Operational Risk threats?      

5. Regulatory change: Part of a Perfect Storm

6. Macroeconomics Threats: Tax, Rising Interest Rates and New Asset Bubbles

7. New Technology: Changing Business Models and Risk Profiles

8. Three Horseman: Societal, Political and Environmental change

9. Backtesting to the Mid-1990s and Conclusions

Part III: What Lessons can the Profession Learn?

Introduction to Part III: What Lessons can the Profession Learn?

10. Defining and cascading Operational Risk appetites

11. Aligning Operational Risk Management Frameworks to Appetites

13. Estimating Exposures to Tail Events

14. Solutions for a Triumvirate of Seemingly Intractable Problems

15. Conclusions

Appendices         

Appendix 1: The Chronology of the LIBOR Scandal

Appendix 2: Some Examples of Common Scenarios

Appendix 3: Mapping of Reputational Risk incidents to Operational, Conduct and Business Risks

Testimonials

"Michael Grimwade has delivered indeed a book on operational risk that resembles no other, providing new insights and pushing the boundaries of what operational risk managers typically contemplate. Unlike its title, the book goes beyond the scope of operational risk and explores, to some length, systemic risks and long term environmental developments that could affect the financial industry and banks in particular. Each of the 14 chapters are illustrated by citations of eclectic sources, including my favourite, from Star Wars’ Yoda, opening a section on action plans: “Do or do not, there is no try”.

Profound understanding doesn’t happen overnight. This book by Michael Grimwade is the result of years, even decades of experience, observation and intelligent analysis of the banking industry that he knows so well.  He has achieved the performance of producing a book that will appeal equally to risk specialists and larger audiences. Operational risk professionals will find in Part 3 further insights and answers to some of their recurring questions; financial risk specialists will appreciate in Part 1 the analysis of the relationships between credit, market and operational risks; while business leaders will find interest in the long term view and strategic positioning of Part 2. Overall, regulators, market observers and everyone having at heart the stability and soundness of the financial sector will find in the entire book important insights and ideas for the years to come." 

Dr. Ariane Chapelle, University College London

 

"Grimwade presents some particularly in-depth analysis of the Libor rigging scandal – and uses a number of other case studies to illustrate his points throughout the book. 
While it deals with a substantial and complex topic, a number of pithy, often humorous and always insightful quotes appear throughout this book that serve to remind the reader of the importance of the human perspective as well as of risk ownership."

Deborah Ritchie, Editor, CIR

 

Customer Reviews

Average customer reviews for Managing Operational Risk: New Insights and Lessons Learnt

First class book

This book should be compulsive reading for all operational risk professionals. I was particularly impressed with the section on transferring credit defaults and market turmoil into operational risk. My first exposure to operational risk was at a bank that had converted some of its credit risk into operational risk and did not understand they had done so. While an expensive lesson was learnt it is disappointing that lots of years later many firms still do not understand when they are creating operational risk in other silos. In addition, the section on new and emerging operational risks addresses the topic that should attract attention from us all as we seek to avoid the next big operational risk event.
Review by Andrew Sheen , 27/11/2016

A Must Read

This book is a must read for any risk manager or more generally bank manager. The author show a real expertise on the topic and the new insights provided are extremely interesting (really forward looking). This book is a reference on the topic.
Review by HASSANI Bertrand Kian (Global Head of Research and Innovation at Banco Santander) , 17/11/2016

Managing Operational Risk by Michael Grimwade

Michael Grimwade has delivered indeed a book on operational risk that resembles no other, providing new insights and pushing the boundaries of what operational risk managers typically contemplate. Unlike its title, the book goes beyond the scope of operational risk and explores, to some length, systemic risks and long term environmental developments that could affect the financial industry and banks in particular. Each of the 14 chapters are illustrated by citations of eclectic sources, including my favourite, from Star Wars’ Yoda, opening a section on action plans: “Do or do not, there is no try”.

Review by Ariane Chapelle (Honorary Reader, University College London) , 17/11/2016

Read more reviews

Incisive Media - AOP Digital Publisher of the Year 2010 & 2013