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The necessity of operational risk management and quantification

Author

Listed:
  • Barbu Teodora Cristina

    (The Academy of Economic Studies, The Faculty of Finances, Insurances, Banks and Stock Exchange)

  • Olteanu (Puiu) Ana Cornelia

    (The Academy of Economic Studies, The Faculty of Finances, Insurances, Banks and Stock Exchange)

  • Radu Alina Nicoleta

    (The Academy of Economic Studies, The Faculty of Finances, Insurances, Banks and Stock Exchange)

Abstract

Beginning with the fact that performant strategies of the financial institutions have programmes and management procedures for the banking risks, which have as main objective to minimize the probability of risk generation and the bank’s potential exposure, this paper wants to present the operational risk management and quantification methods. Also it presents the modality of minimum capital requirement for the operational risk. Therefore, the first part presents the conceptual approach of the operational risks through the point of view of the financial institutions exposed to this type of risk. The second part describes the management and evaluation methods for the operational risk. The final part of this article presents the approach assumed by a financial institution with a precise purpose: the quantification of the minimum capital requirements of the operational risk.

Suggested Citation

  • Barbu Teodora Cristina & Olteanu (Puiu) Ana Cornelia & Radu Alina Nicoleta, 2008. "The necessity of operational risk management and quantification," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 3(1), pages 661-667, May.
    • Handle: RePEc:ora:journl:v:3:y:2008:i:1:p:661-667
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    File URL: http://steconomice.uoradea.ro/anale/volume/2008/v3-finances-banks-accountancy/118.pdf
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    References listed on IDEAS

    as
    1. Patrick de Fontnouvelle & Eric Rosengren & John Jordan, 2007. "Implications of Alternative Operational Risk Modeling Techniques," NBER Chapters, in: The Risks of Financial Institutions, pages 475-505, National Bureau of Economic Research, Inc.
    2. Marco Moscadelli, 2004. "The modelling of operational risk: experience with the analysis of the data collected by the Basel Committee," Temi di discussione (Economic working papers) 517, Bank of Italy, Economic Research and International Relations Area.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Olajide Solomon Fadun & Diekolola Oye, 2020. "Impacts of Operational Risk Management on Financial Performance:A Case of Commercial Banks in Nigeria," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(1), pages 22-35, January.

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    More about this item

    Keywords

    Operational risk; operational risk profile; standard approach; gross income; administrative general expenses;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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