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Operational Risk Modelling and Management

Claudio Franzetti author

Format:Hardback

Publisher:Taylor & Francis Inc

Published:15th Oct '10

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Operational Risk Modelling and Management cover

Taking into account the standards of the Basel Accord, Operational Risk Modelling and Management presents a simulation model for generating the loss distribution of operational risk. It also examines a multitude of management issues that must be considered when adjusting the quantitative results of a comprehensive model.

The book emphasizes techniques that can be understood and applied by practitioners. In the quantitative portions of the text, the author supplies key concepts and definitions without stating theorems or delving into mathematical proofs. He also offers references for readers looking for further background information. In addition, the book includes a Monte Carlo simulation of risk capital in the form of a run-through example of risk calculations based on data from a quantitative impact study. Since the computations are too complicated for a scripting language, a prototypical software program can be downloaded from www.garrulus.com

Helping you navigate the tricky world of risk calculation and management, this book presents two main building blocks for determining how much capital needs to be reserved for operational risk. It employs the loss distribution approach as a model for calculating the risk capital figure and explains risk mitigation through management and management’s actuations.

This book outlines a complete and detailed description of one specific approach to modeling operational risk in accordance with Basel 2. However, the approach could easily be applied in the wider financial services sector. The author also offers some prototypical software to take you through the book’s example. … This book would be most useful for new entrants into the risk management arena, particularly in banking but also in financial services generally. For those thinking about operational risk for the first time, it would give some useful background and theory. For the more experienced in the operational risk field, it would serve better as a reference document.
—Andrew Couper, Annals of Actuarial Science, Vol. 5, 2011

In this book, Claudio Franzetti deals with operational risks such as those recently brought into focus through the financial crisis (especially in the banking industry) … [He] handles the subject almost entirely without mathematical proofs and theorems and finds simple explanations for complicated relationships. In addition, the rich literature list stimulates further reading.
Absolut report, February 2011

ISBN: 9781439844762

Dimensions: unknown

Weight: 703g

414 pages