Description: Financial institutions have and continue to suffer substantial financial losses because of their exposures to various operational risks and insufficient risk management. Quantifying operational risk is a critical component of an institution’s ability to manage risk. The model described in the article provides a numerical measure for operational risks existing in a business entity through statistical methods. It takes experience data to reflect both the general features and company specifics of the defined operational risks, while also allowing for managerial discretion. An important achievement is to suggest a level of capital to hold against potential losses arising from operational risks.

Description: Hear from the editor’s on the December 2018 issue of Risk Management published by the JRMS.

Description: Hear from the editor’s on the August 2018 issue of Risk Management published by the JRMS.

Description: Hear from the editor’s on the December 2018 issue of Risk Management published by the JRMS.

Description: Hear from the editor’s on the March 2018 issue of Risk Management published by the JRMS.

Description: Increased attention was paid to regulatory capital with the global financial crisis in 2008. Whilst companies may not have the incentives to retain a large amount of capital in the absence of regulatory capital requirements, overcapitalized entities can have drawback such as its impact on competitiveness. There are other weaknesses in the regulatory capital model such as its limitation in facilitating risk-based decisions as regulatory capital does not necessarily reflect the economic reality and risks an entity faces. Nonetheless, there are ways for regulators and/or companies to handle the weaknesses in the regulatory capital model. For instance, granularity can be introduced in determining regulatory capital. Economic capital can be used to encourage entities to implement risk management controls and facilitate risk-based business decisions (e.g., risk-adjusted performance assessment and risk-based capital allocation). Ultimately, hav ing effective risk management and risk-based capital determination are ways to prevent company failures and bankruptcies.

Description: Hear from the chairperson on themes in the August 2016 issue of Risk Management published by the JRMS.

Description: Hear from the chairperson on themes in the December 2016 issue of Risk Management published by the JRMS.

Description: Hear from the editor’s on the March 2017 issue of Risk Management published by the JRMS.

Description: Hear from the editor’s on the December 2018 issue of Risk Management published by the JRMS.