Principles for the Management of Operational Risk

Why Should You Attend:

Although financial institutions have been managing risk exposures for years operational risk management as a discipline is relatively new. The change in focus to operational risk management has been driven by a number of factors, led in the first instance by the compliance requirements of bank regulators. Regulators look to the Bank for International Settlements (BIS) to formulate position and regulatory consensus in the world.

“Principles for the Sound Management of Operational Risk” highlights the evolution of operational risk management. The principles outlined in this key BIS report are based on best industry practice and supervisory experience, and cover three overarching themes: governance, risk management and disclosure. In this webinar, we will discuss the practicality of these principles and the implementation factors with each of them. We will examine a powerful banking case study and put these Principles to the test.

Areas Covered in the Webinar:

• Implementing Basel's “Sound Practices for the Management and Supervision of Operational Risk”
• Principles for the management of operational risk
• Sound operational risk governance
• Each of the 11 Principles are examined in terms of their
  • Content
  • Meaning
  • Implementation factors
  • Responsibilities
• Banking Case study in risk realized

Who Will Benefit:

• Financial Officers
• Risk Officers
• Internal Auditors
• Operational Risk Managers
• Staff with roles and responsibilities in operational risk in risk management departments, businesses and central departments.

Stanley Epstein
Company Director & Principal Associate, Citadel Advantage

Stanley is a Principal Associate and Director of Citadel Advantage Ltd., Since 2001 Citadel Advantage has been working with banks and financial institutions to make them safer and more profitable, through consulting and training, specifically in the key areas of Governance, Risk Management and Compliance.

Stanley has over 40 years of banking and IT experience, 33 of which were with the Standard Bank of South Africa where during the 1990s he filled an industry level role holding several key positions including that of Chairman of the PASA Risk Committee. He also represented South Africa at two sessions, in New York, of UNCITRAL (the United Nations Commission on International Trade Law).

He holds a Master Degree in Economics and a Bachelor of Commerce (BCom.) degree, both from the University of South Africa, Pretoria.

Stanley has had extensive exposure to banking practice and banking operations in a number of countries including the USA, United Kingdom, South Africa, Israel, Europe and Australia. He has also acted as advisor to a number of central banks on payment systems, oversight, policy and payments risk issues.

More recently, he spent time in the high-tech sector as a payment systems designer and consultant to a global payments software developer.

Topic Background:

In “Sound Practices for the Management and Supervision of Operational Risk”, published in February 2003, the Basel Committee on Banking Supervision published a framework of principles for the industry and supervisors.

Since then, banks and supervisors have expanded their knowledge and experience in implementing operational risk management. Loss data collection, quantitative impact studies, and range of reviews covering governance, data and modeling have contributed to industry and regulatory knowledge.

As a result of these changes, the BIS determined that the 2003 Sound Practices paper needed updating to reflect the operational risk management practices now in use. “Principles for the Sound Management of Operational Risk and the Role of Supervision” assimilates the evolution of sound practice, detailing eleven principles of sound operational risk management covering (1) governance, (2) risk management environment and (3) the role of disclosure. By publishing an updated paper, the BIS enhances the original sound practices framework with specific principles for the management of operational risk that are consistent with sound industry practice. This new document replaced the 2003 “Sound Practices” and became the document referenced in the Basel accords.

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