RSK4801
Assignment 2
Due July 2025
,RSK4801
Assignment 2
Due July 2025
Critical Analysis of Operational Risk Management Frameworks: Reporting, Risk
Allocation, RCSA Approaches, and the Three Lines of Defence at Region Bank
1
, Introduction
Operational risk management stands as a cornerstone of financial institutions’
resilience, particularly within contexts marked by the multidimensional complexities of
post-COVID-19 recovery, accelerating climate risks, and technological disruption. The
Region Bank’s operational risk framework, as outlined in the case study, reflects a
deliberate and strategic commitment to governance, compliance, and stakeholder trust
in 2021—a year defined by volatile economic conditions and intensifying environmental
challenges. This response addresses four critical questions related to compiling an
operational risk report, delivering a structured and academically rigorous analysis
suitable for postgraduate discourse. It strengthens critical engagement by interrogating
underlying assumptions, identifying tensions or contradictions within and between
concepts, and exploring broader implications and long-term consequences. Additionally,
clarity and logical flow are refined through precise transitions, integrated academic
vocabulary, and sophisticated sentence structures. Drawing on Blunden (2013) and
other scholarly sources, the analysis underscores that operational risk reporting is both
a technical discipline and a strategic narrative embedded within broader institutional
philosophies of governance and resilience.
1. Benefits of a Sound Operational Risk Report
1.1 Definition and Purpose
A sound operational risk report is a structured communication tool that articulates an
institution’s exposure to operational risks, mitigation strategies, and alignment with
regulatory and internal risk appetite frameworks (Blunden, 2013). Its purpose extends
beyond mere documentation, aiming to empower stakeholders—such as the Board,
regulators, and investors—with actionable insights into the institution’s risk management
efficacy. This rests upon the philosophical assumption that knowledge, when
systematised and communicated through formal reporting structures, can directly
translate into rational, effective action. However, tensions emerge where the interpretive
capacity of stakeholders differs, risking misalignment between communicated risks and
enacted mitigations.
2
Assignment 2
Due July 2025
,RSK4801
Assignment 2
Due July 2025
Critical Analysis of Operational Risk Management Frameworks: Reporting, Risk
Allocation, RCSA Approaches, and the Three Lines of Defence at Region Bank
1
, Introduction
Operational risk management stands as a cornerstone of financial institutions’
resilience, particularly within contexts marked by the multidimensional complexities of
post-COVID-19 recovery, accelerating climate risks, and technological disruption. The
Region Bank’s operational risk framework, as outlined in the case study, reflects a
deliberate and strategic commitment to governance, compliance, and stakeholder trust
in 2021—a year defined by volatile economic conditions and intensifying environmental
challenges. This response addresses four critical questions related to compiling an
operational risk report, delivering a structured and academically rigorous analysis
suitable for postgraduate discourse. It strengthens critical engagement by interrogating
underlying assumptions, identifying tensions or contradictions within and between
concepts, and exploring broader implications and long-term consequences. Additionally,
clarity and logical flow are refined through precise transitions, integrated academic
vocabulary, and sophisticated sentence structures. Drawing on Blunden (2013) and
other scholarly sources, the analysis underscores that operational risk reporting is both
a technical discipline and a strategic narrative embedded within broader institutional
philosophies of governance and resilience.
1. Benefits of a Sound Operational Risk Report
1.1 Definition and Purpose
A sound operational risk report is a structured communication tool that articulates an
institution’s exposure to operational risks, mitigation strategies, and alignment with
regulatory and internal risk appetite frameworks (Blunden, 2013). Its purpose extends
beyond mere documentation, aiming to empower stakeholders—such as the Board,
regulators, and investors—with actionable insights into the institution’s risk management
efficacy. This rests upon the philosophical assumption that knowledge, when
systematised and communicated through formal reporting structures, can directly
translate into rational, effective action. However, tensions emerge where the interpretive
capacity of stakeholders differs, risking misalignment between communicated risks and
enacted mitigations.
2
