Operational Risk Management Case Study

756 Words4 Pages

Operational risk is defined as a change in value caused by the fact that actual losses, failed internal process, people, system, or from external events such as legal risk. The operational risk is exists in every corporation and organization, no matter the size or construe of the institution. For ICBC, the operational risk is defined as more specific, “risk of loss resulting from insufficient or problematic internal process, employees and IT system or from external events, including legal risk”. (Page 78, 2013 ICBC annual report) Also, Legal risk and anti-money laundering should be consider and analysis in operational risk management. Moreover, country risk should be cover in the risk management even thought it is not including in the operational …show more content…

In more details, Board of the Directors has responsibility for implementing the strategy and overall policy for operational risk management. The Senior Management is the organizer and coordinator of operational risk management, it reviewing and approving the actions in risk management. Then, Marketing and Product Department is the first line of defense risk, it direct responsibility for risk management in each business line. Also, the second line of defense operational risk management is Internal Control and Compliance Department. This department is responsible for the overall risk management and implementation of risk management system at each level. Moreover, Internal Audit Department is the third line for operational risk management. It is responsible for auditing and evaluating the functioning of risk management …show more content…

For ICBC, the bank established a sound legal risk management system to prevention and control legal risk. The Board of Directors and the Senior Management has each own responsibility to legal risk management. The Legal Affairs Department of the Head Office is the functional department in management legal risk across the Bank, and all domestic and overseas branches manage legal risk of their respective

Open Document