Even for CROs with analytical backgrounds, such as the actuaries profiled in this edition, the challenges of getting a handle on operational risk–and quantifying it–are among the biggest they face in their roles as chief risk officers.
Taking a definition from banking regulators, Donald Mango, managing director of Guy Carpenter & Company in New York, said operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from natural hazards.
In simple terms, the first part of the definition speaks of the risk of “the wrong people doing the wrong things at the wrong time,” Jeff Mohrenweiser, an analyst from Fitch Ratings, told NU last year.
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