, RSK4801 Assignment 4 (COMPLETE ANSWERS) Semester 2 2025
– DUE 3 October 2025;100% trusted ,comprehensive and complete
reliable solution with clear explanation
Question 1 (10 marks)
Define operational risk and compile a draft design for the operational
risk report to serve as a guideline for the risk management team
responsible for drafting it.
Definition of Operational Risk
According to the Basel II/III framework, operational risk refers to the
possibility of losses that arise from weaknesses or failures in a bank’s
internal processes, people, or systems, as well as from unexpected
external events. It is distinct from credit and market risk but equally
significant in impacting financial stability. Examples include internal
fraud, staff errors, or misconduct that compromise the integrity of
operations. Legal risks, such as penalties from non-compliance or
lawsuits, also fall under this category. Technological failures like system
breakdowns, cyberattacks, or data breaches represent major operational
threats. External disruptions, including natural disasters, pandemics, or
political unrest, can also halt or damage operations. Effective risk
management requires strong internal controls, sound governance, staff
training, and disaster recovery plans.
– DUE 3 October 2025;100% trusted ,comprehensive and complete
reliable solution with clear explanation
Question 1 (10 marks)
Define operational risk and compile a draft design for the operational
risk report to serve as a guideline for the risk management team
responsible for drafting it.
Definition of Operational Risk
According to the Basel II/III framework, operational risk refers to the
possibility of losses that arise from weaknesses or failures in a bank’s
internal processes, people, or systems, as well as from unexpected
external events. It is distinct from credit and market risk but equally
significant in impacting financial stability. Examples include internal
fraud, staff errors, or misconduct that compromise the integrity of
operations. Legal risks, such as penalties from non-compliance or
lawsuits, also fall under this category. Technological failures like system
breakdowns, cyberattacks, or data breaches represent major operational
threats. External disruptions, including natural disasters, pandemics, or
political unrest, can also halt or damage operations. Effective risk
management requires strong internal controls, sound governance, staff
training, and disaster recovery plans.
