Risk Management Literature Review

9763 Words40 Pages

Various articles appeared in different journals on various aspects of operational risk but they are restrictive in nature and do not give a comprehensive picture. A brief review of some of the relevant literature is as under:
Adrian (1999) examined the use of advanced probability models to evaluate risks and justify the decisions where reliable data is available, e.g. reinsurance, money markets and nuclear energy. In the first part, observations are made about the factors shaping operational risk management: the increasing shift of influence from tangible to intangible variables; the intuitive manner in which most operational risk is managed;
…show more content…
However, several studies suggested that customers have not adopted B2C e-commerce in the same degree primarily because of risk concerns and trust-related issues. This study extended an area of information systems research into a marketing of financial services context by looking into the element of trust and risk in e-banking. A conceptual model of trust in e-banking is proposed with two main antecedents that influence customer’s trust i.e. perceived security and perceived privacy. The antecedent variables are moderated by the perceived trustworthiness attributes of the bank, which includes benevolence, integrity and competence. Trust is being defined as a function of the degree of risk involved in the e-banking transaction, and the outcome of trust is proposed to be reduced perceived risk, leading to positive intentions towards adoption of…show more content…
(2006) analyzed the capacity of response of the banking sector’s information systems (IS), in the light of the new requirements of Basel II (Basel Bank for International Settlements) on the measurement and control of operational risk (OR). By means of a structured case, developed with a Spanish savings bank of medium size, an analysis was made of the practices and structures that may need to be modified to prevent a loss of competitive position. Specific improvements were proposed to facilitate the implementation of an operational risk information system (OR-IS). The study concluded that there still exists a considerable distance between the current IS in use and an OR-IS compatible with the model proposed under Basel II, for that kind of entities, and indicated the opportunities and incentives that would arise in the attempt to reduce this distance. The IS of a bank should evolve towards the achievement of an OR-IS that enables the bank’s competitive position to be strengthened. In addition, the bank should aspire to obtain the external validation of its supervisory authority, which certifies the OR-IS implemented and classifies it as an advanced measurement approach (AMA) under Basel II. An analysis was made of the principal organizational weaknesses and necessities that should be rectified; with a view to applying the methodologies designated the AMA to OR in the Basel II agreement. Basel II had given increased visibility to the “OR” variable and there

More about Risk Management Literature Review

Open Document