Barings and Sumitomo, where a lack of management oversight allowed traders Nicholas Leeson to bankrupt the first and Yasuo Hamanaka to hide $2.6 billion in copper futures losses at the second, are among the names that catapulted from the business pages to the front page. Likewise, the mutual fund late-trading cases and the global settlements of the investment banking retail analyst investigations brought the business of Wall Street into the consciousness of Main Street.

These failures, scandals and headlines all share one common theme: Better operational controls could have prevented them. The ability of an institution to properly manage these types of exposures, including conflicts of interest and regulatory and legal risks, are essential components of operational risk management.

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