HKS Affiliated Authors

Excerpt

Bank Capital for Operational Risk: A Tale of Fragility and Instability. Hal Scott, February 10, 2014, Paper. "Operational risk is fundamentally different from all other risks taken on by a bank. It is embedded in every activity and product of an institution, and in contrast to the conventional financial risks (e.g. market, credit) is harder to measure and model, and not straight forwardly eliminated through simple adjustments like selling off a position. Operational risk tends to be about 9-13% of the total risk pie, though growing rapidly since the 2008-09 crisis..." Link verified June 19, 2014