Systemic Operational Risk

The financial industry is still trying to understand how to regulate risks such as those that arose in the PPI and LIBOR scandals. Initiatives to address systemic risk by international regulators include micro-prudential regulations, such as increasing capital for systemically important banks, and macro-prudential initiatives, such as the creation of the European Systemic Risk Board.

Systemic Operational Risk gives readers a better understanding of operational risks that surface across the financial system rather than within one institution.  When considering new products and new business opportunities, readers will be able to analyse how risks can arise when competitors operate in the same markets.

Systemic operational risk issues are an unavoidable reality and banks will need to find ways to provide a more realistic stress test to investors and regulators, as such systemic issues will be a risk for the foreseeable future.

The book is divided into three sections. The first introduces some of the key concepts in the book; the second provides case studies on systemic operational risk; and the third discusses the regulation of systemic operational risks.