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The Near‐Miss Management of Operational Risk

ALEXANDER MUERMANN (Assistant professor of Insurance and Risk Management at The Wharton School, University of Pennsylvania in Philadelphia, PA. muermann@wharton.upenn.edu)
ULKU OKTEM (Adjunct professor of Operations and Information Management and a senior fellow at the Risk Management and Decision Processes Center at The Wharton School, University of Pennsylvania in Philadelphia, PA. oktem@flharton.upenn.edu)

Journal of Risk Finance

ISSN: 1526-5943

Article publication date: 1 April 2002

1337

Abstract

Over recent decades, banks and bank regulators have devoted substantial resources to managing market risk and credit risk. More recently industry and regulatory focus has shifted to the mitigation of operational risk. This article addresses the Advanced Measurement Approaches under which banks would be allowed to determine capital requirements, based on their own internal assessment of operational risk, according to standards set by the Basel Committee. The authors propose adopting the concept of “nearmiss” risk assessment employed in the chemical, health, and airline industries to internally evaluate operational risk.

Citation

MUERMANN, A. and OKTEM, U. (2002), "The Near‐Miss Management of Operational Risk", Journal of Risk Finance, Vol. 4 No. 1, pp. 25-36. https://doi.org/10.1108/eb022951

Publisher

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MCB UP Ltd

Copyright © 2002, MCB UP Limited

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