Original Source: RiskArticles.com
Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk (BCBS). Operational risk is different from other risks (e.g. credit, market, liquidity) because it is usually not taken in exchange for an expected return; it exists in the natural course of business activity. Failure to appropriately manage operational risk can expose firms to significant losses.
Contributors: Open SourceCategories: Industry Articles, SIG U Resource
SRC Type: Risk Management, Sourcing Management, Third Party Management