Chase Cooper launches a New Series of Workshops Using Scenario Based Analysis to Enable Firms to Understand Their Real Exposure to Rogue Trading Risk

3 October 2011

Chase Cooper today announced it has developed a series of scenario based workshops which will focus on the exposure of firms to changes in their control environment and enable firms to obtain an understanding of their real exposures. Chase Cooper believes that traditional reviews of a firm's exposure to events such as unauthorised trading give a false sense of security and firms need to investigate the sensitivity of controls to changes in their effectiveness and to develop a clearer understanding of the speed at which such changes are identified and acted upon. Firms need to continually apply scenarios to investigate the circumstances under which losses can occur.

Professor Tony Blunden, Head of Consulting at Chase Cooper and co-author of the acclaimed book Mastering Operational Risk. commented, "Firms should not just be asking 'could it happen here?' but should be asking 'what would need to occur before it happens here?'. The key issue is the relationship of a firm's exposure to degradations in controls, and the time frame in which they take place. The sensitivity to change is too often ignored in the analysis of control environments. If Boards' ask the wrong question it is inevitable they will get the wrong answer".

The workshops will enable firms to understand the conditions under which undetected Rogue Trading can occur and apply this knowledge to differing business lines.

Professor Blunden further commented, "merely understanding current controls is not enough, firms need to establish a culture whereby a continuing process of evaluation of potential points of failure is the norm.”

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