Operational Risk in NYC
John Kelly 270004J7VQ firstname.lastname@example.org | | 0 Comments | 301 Visits
The sea of blue suits at the OpRisk North America conference being held in New York City this week provides a stark contrast to the cold rain falling in Times Square. The conference kicked off with a keynote address from Mitsutoshi Adachi, director and deputy division chief at the Bank of Japan. Mr. Adachi, who also serves as chair of the SIG Operational Risk Subgroup for the Basel Committee, noted that his travel plans had to be moved up a few days in order to account for the continued travel delays out of Japan.
His keynote highlighted a recent report published by the Basel Committee on Banking Supervision titled “Operational Risk – Supervisory Guidelines for the Advanced Measurement Approaches” which found that “Operational risk capital for non-AMA banks is higher than for AMA banks, regardless of the exposure indicator used for scaling.” Mr. Adachi also noted in his address that AMA firms showed “only modest increases in losses during the financial crisis period.” Certainly not an unexpected result but what was telling was his finding that for the period of 2008 to 2009 (during the financial crisis), operational risk losses for all banks were “2 to 3 times fold” compared with the previous Basel Committee internal loss data collection period of 2005 – 2007. Mr. Adachi declined to field a question on which business lines contributed the most to the losses, per his obligation to keep such information confidential.
He concluded by saying that “the Basel Committee finds it even more important to engage with the industry” moving forward. Looking forward to the Plenary address “Reforming U.S. financial markets: reflections before and beyond Dodd-Frank.”