Ten Laws of Operational Risk: Understanding its Behaviours to Improve its Management

The book "Ten Laws of Operational Risk" provides an insightful discussion of operational risk and offers a groundbreaking redesign of the profession's existing tools. It is grounded on the business profiles of firms and the human and institutional behaviors that drive operational risk. The author's Ten Laws are based on taxonomies for the causes, inadequacies, and failures that constitute control failures and events, and the impacts of operational risks. The book explains patterns and trends in historical data and offers solutions to persistent problems in risk appetite, RCSAs, scenario analysis, reputational risk, stress testing, capital modeling, and insurance. It also provides fresh insights into the everyday activities of risk managers with respect to predictive key risk and control indicators, root cause analysis, why controls fail, the risks posed by change, and product risk profiles. The book is a valuable resource for Chief Risk Officers, other risk professionals, regulators, management consultants, and students and scholars of operational risk.

Format: Hardback
Length: 416 pages
Publication date: 30 December 2021
Publisher: John Wiley & Sons Inc

Operational risk, unlike credit and market risk, lacks a comprehensive theory to explain its occurrence and causes. As a result, operational risk managers have resorted to inadequate tools and processes that fail to provide sufficient commercial value. In his book, Ten Laws of Operational Risk: Understanding its Behaviors to Improve its Management, Michael Grimwade offers a profound exploration of operational risk and a revolutionary reimagining of the profession's existing tools. The author's Ten Laws are grounded in the business profiles of firms and the human and institutional behaviors that drive operational risk. These laws are supported by taxonomies that categorize the causes, inadequacies, and failures of both control failures and events, as well as the impacts of operational risks.

Drawing on a wealth of twenty-five years of firsthand experience and extensive research, this book provides insightful explanations of patterns and trends evident in historical data. It offers solutions to persistent challenges in risk appetite, risk control self-assessments (RCSAs), scenario analysis, reputational risk, stress testing, capital modeling, and insurance. Additionally, it offers fresh insights into the daily activities of risk managers, including the identification of predictive key risk and control indicators, root cause analysis, the reasons behind control failures, the risks associated with change, and product risk profiles.

Ten Laws of Operational Risk presents a structured and evidence-based approach to identifying emerging risks and predicting future behaviors related to pandemics, climate change, cybercrime, artificial intelligence, and machine learning. It includes revealing industry data, in-depth case studies, and real-world examples that shed light on recurring and stubborn problems in operational risk management. By embracing the principles outlined in this book, operational risk managers can enhance their effectiveness and contribute to the overall resilience of their organizations.

Weight: 748g
Dimension: 160 x 323 x 32 (mm)
ISBN-13: 9781119841357