There are no simple solutions for measuring and managing operational risk, a broad, relatively new discipline that includes risks related to human failure – such as rogue trading, fraud and lawsuits. But people risks can be mitigated, if firms establish smart procedures and policies for recruiting, guiding and retaining employees. ... click here for more details.

Financial institutions are increasingly looking to outsource certain functions and processes to offshore service providers. But what are the potential dangers of outsourcing, and what types of operational risks must firms evaluate before entering into to an agreement with an offshore service provider? Vidyasagar Pulavarti examines these key issues.

Since operational risk is such a wide-ranging discipline, it poses a huge risk measurement challenge for most firms. But institutions which aggressively collect and file loss data – for both internal and external events – at least have a fighting chance. Dr.Agatha Kalhoff and Marcus Haas explain the importance of loss data collection ... click here for more details.

Implied volatility is one popular technique quants use to predict the ups and downs of the options market. But what are the origins of implied volatility, why is it strange and what are the best approaches for calculating it? Michael B. Miller not only answers these key questions but also weighs the ... click here for more details.

Asset-liability management has emerged as an important tool for increasing shareholder value and enhancing risk control at banks and insurance companies. But in the European financial services industry, banks have been far more successful at implementing ALM than insurers. Heinz Zimmerman examines the reasons behind the ALM difficulties of European insurers, and explains ... click here for more details.

Editors Letter Operational Risk:The People Dilemma

Survey Results: Asia Trails North America and Europe in Quest for Basel II Compliance; Overall Response to the Accord is Positive

Michael Gordy, a senior economist at the Board of Governors of the Federal Reserve System and an innovator in the field of credit risk modelling, was recently honored as GARP’s Risk Manager of the Year. GRR takes a closer look at his accomplishments, background and future plans.

The deadline for what is expected to be the final draft of the Basel II risk-capital accord is fast approaching, but potential roadblocks to implementation remain. In a wide-ranging, indepth interview with GRR Editor Robert Sales, Jaime Caruana – chairman of the Basel Committee on Banking Supervision – discussed draft and ... click here for more details.

Climate change and renewable energy are hotly-debated issues, with governments actively looking at carbon sequestration to increase the value of companies that don’t have to pay to dispose of their carbon. Beth Ambrose looks at some of the sustainability risks and opportunities in the European electric utility sector.