Operational risk management and performance of the banking industry : from the collapse of barings bank to Basel IV

Abstract

In the last century, the world has encountered several events that have significantly impacted the financial industry: Black Tuesday, the collapse of the Barings Bank, rogue trading at Société Générale, and the subprime mortgage crisis are only a few examples. This thesis demonstrates that operational risk management in the banking sector has evolved within an environment that is in constant movement. The political reactions to significant triggering events have designed the regulatory framework of the financial industry, in which banks have designed their control systems. This document uses a historical analysis to predict what the future of the operational risk management could be.