Operational Risk [3]

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Bullet points include: Difficult to define precisely. One approach is to define it as all risks faced by a financial firm except for credit, market, liquidity and insurance risks. So residual category including, e.g.: Fraud, legal risk, IT failures, disasters/accidents. Business risk (here consisting of risk that firm will take poor decisions, for example engaging in a reorganisation that proves unprofitable). See also Kemp and Patel (2011). Asymmetric profile

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