Operational Risks and their Roots, Results and Remedies

By:  Greg Suddards

A number of discussion topics on various Linked-In groups in recent months have suggested that the four issues above warrant serious consideration. Rather than devote attention to the question of which is involved in any particular debate, the tendency, it would seem, has been for practitioners to define new categories of risks. Inevitably, the risk universe has been expanded rapidly but the consequence has been confusion. The thoughts below on the subjects, therefore, have been posted in the hope that they will encourage sufficient discussion to bring clarity to the various concepts. After all, if practitioners cannot gain consensus it is difficult to imagine how risk managers will earn credibility with management. The comments in the remainder of the article are confined to Operational Risk Management where the least cohesion appears to exist although they ought to have just as much relevance to the disciplines of Credit Risk, Market Risk, Liquidity Risk, Margin Risk and Strategic Risk.

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