RSK4801
ASSIGNMENT 2 2025
UNIQUE NO.
DUE DATE: 2025
, RSK4801 ASSIGNMENT 02 (2025)
Operational Risk Reporting
Student Name:
Student Number:
Question 1: Discuss the benefits of a sound operational risk report (10 Marks)
A sound operational risk report is a crucial component of enterprise risk management
(ERM), particularly in the banking sector. Its benefits include:
1. Enhanced Decision-Making: A reliable operational risk report enables
management and the board to make informed decisions based on accurate and
timely risk data (Basel Committee on Banking Supervision, 2011).
2. Improved Risk Awareness and Culture: It promotes a risk-aware culture
across the institution by highlighting current and emerging risks and the bank's
response strategies.
3. Regulatory Compliance: Banks operate in a highly regulated environment. A
comprehensive risk report demonstrates adherence to regulatory frameworks,
such as Basel III, and national banking regulations.
4. Stakeholder Confidence: Transparent reporting builds trust among investors,
regulators, and other stakeholders, showing the institution’s commitment to
sound risk management.
5. Risk Appetite Monitoring: It assists in ensuring that the bank’s risk-taking
activities are aligned with its approved risk appetite.
6. Loss Prevention and Control Enhancement: The identification and analysis of
loss events, near misses, and control weaknesses allow the bank to implement
corrective and preventive measures.
7. Support for Strategic Objectives: Operational risk reporting helps align risk
management practices with strategic goals, ensuring long-term sustainability.
ASSIGNMENT 2 2025
UNIQUE NO.
DUE DATE: 2025
, RSK4801 ASSIGNMENT 02 (2025)
Operational Risk Reporting
Student Name:
Student Number:
Question 1: Discuss the benefits of a sound operational risk report (10 Marks)
A sound operational risk report is a crucial component of enterprise risk management
(ERM), particularly in the banking sector. Its benefits include:
1. Enhanced Decision-Making: A reliable operational risk report enables
management and the board to make informed decisions based on accurate and
timely risk data (Basel Committee on Banking Supervision, 2011).
2. Improved Risk Awareness and Culture: It promotes a risk-aware culture
across the institution by highlighting current and emerging risks and the bank's
response strategies.
3. Regulatory Compliance: Banks operate in a highly regulated environment. A
comprehensive risk report demonstrates adherence to regulatory frameworks,
such as Basel III, and national banking regulations.
4. Stakeholder Confidence: Transparent reporting builds trust among investors,
regulators, and other stakeholders, showing the institution’s commitment to
sound risk management.
5. Risk Appetite Monitoring: It assists in ensuring that the bank’s risk-taking
activities are aligned with its approved risk appetite.
6. Loss Prevention and Control Enhancement: The identification and analysis of
loss events, near misses, and control weaknesses allow the bank to implement
corrective and preventive measures.
7. Support for Strategic Objectives: Operational risk reporting helps align risk
management practices with strategic goals, ensuring long-term sustainability.
