Part I of the study, which was completed last year, created a map that identifies the high-risk points for operational risks in a typical financial institution.
Part II will create an online library that identifies, defines, evaluates and catalogues some 1,500 risk indicators when it is completed in early fall, 2004.
John Drew, RMA board member and EVP and chief risk officer of Southwest Bank of Texas, Houston, commented, "We see real practical benefits to participating in this study. The risk mapping, the round tables and the library are all helping us enhance the risk management capability our stakeholders need. And, at the same time, we think our perspective will help ensure that the study identifies and defines risk indicators, which can be used throughout the financial industry."
So far, 50 financial institutions representing 18 countries are participating in Part II of the study: 11 from Asia, Australia and the Pacific Rim; 17 from North America; and 22 from Europe, the Middle East and Africa. Forty-one of the participants are banks. The remaining participants include building societies, savings and loans, broker-dealers, investment banks, fund managers and finance companies.
Suzanne Labarge, RMA chair and vice chairman and chief risk officer of RBC
Financial Group, Toronto, said, "The KRI study is an important step forward for the industry in enhancing the management of operational risk. While KRIs, like operational risks, are not new, a common language and a common framework have been lacking, often even within a single organization. The work done in the study will lead the way to better defined, better understood indicators of operational risk exposures in our industry, worldwide."
Nine financial institutions have acted as Lead Participants and have appointed a representative to the studyâs steering committee:
Â· Deutsche Bank AG
Â· Dresdner Kleinwort Wasserstein
Â· JP Morgan Chase
Â· RBC Financial Group
Â· State Street Corporation
Among the 41 other full participants are:
Alliance & Leicester
Bank Austria Creditanstalt
Bank Julius Bear
Federation des Caisses de Quebec
Halifax Bank of Scotland
Huntington National Bank
Standard Bank Group of South Africa
Southwest Bank of Texas
Sumitomo Misui Bank
Svenska Enskilda Banken
This summer, the Steering Committee, RMA and RiskBusiness are beginning the
planning for Part III, which will deepen and broaden the library and launch