Operational Risk of a Commercial Bank: The Problem of Assessment

Abstract

This study is dedicated to the current state of the problem of operational risk assessment and management concerning commercial banks. Aim. This study evaluates the possibility of implementation of the Basel standards for operational risk assessment by Russian commercial banks. Tasks. This study defines the concept of operational risk of a commercial bank; analyzes major approaches to assessing the operational risk of a commercial bank; identifies the benefits and drawbacks of different approaches and defines the concept of operational risk capital. Methods. This study uses empirical research methods. Results. The Basel Committee proposes three major approaches to the assessment of operational risk capital: basic indicative, standardized, and improved. Each approach has its own benefits and drawbacks (problems of implementation by Russian commercial banks). Thus, all approaches require an improvement in the risk management systems in a bank. Conclusion. Implementation of the Basel standards for the assessment of operational risk capital by Russian banks requires a series of measures aimed at improving the risk management systems in banks. In particular, it is necessary to establish a separate division involved in the collection and processing of data on the bank’s financial and material losses due to the assumption of operational risk in the context of the major directions of the bank’s activities.