What are Basel risk categories?
What are Basel risk categories?
Classification of operational risks
| Categories | Activity Examples |
|---|---|
| Improper Business or Market Practices | Antitrust Improper trade / market practices Market manipulation Insider trading (on firm’s account) Unlicensed activity Money laundering |
| Product Flaws | Product defects (unauthorised, etc.) Model errors |
How many Basel II Level 1 Event categories are there?
7 categories
Basel II provides 7 categories of level 1 loss events that most firms have adopted to meet their own operational risk (OpRisk) framework requirements.
What is risk event type?
There are four significant classifications of event risk based on the risk: Opportunity Risk, Risk of Uncertainty, Risk of Hazards, and Operational Risk. Organizations and individuals can get insured against risks like natural calamities, fire, or other such unforeseen risks.
What are categories of risk?
Top 15 Risk Categories
- #1 – Operational Risk. Operational risks.
- #2 – Budget Risk.
- #3 – Schedule Risk.
- #4 – Technical Environment Risk.
- #5 – Business Risk.
- #6 – Programmatic Risk.
- #7 – Information Security Risk.
- #8 – Technology Risk.
What are the five main categories of risk?
They are: governance risks, critical enterprise risks, Board-approval risks, business management risks and emerging risks. These categories are sufficiently broad to apply to every company, regardless of its industry, organizational strategy and unique risks.
What are the three types of controls for risk management?
Risk control methods include avoidance, loss prevention, loss reduction, separation, duplication, and diversification.
What is Basel II framework?
Basel II is the second of three Basel Accords. It is based on three main “pillars”: minimum capital requirements, regulatory supervision, and market discipline. Minimum capital requirements play the most important role in Basel II and obligate banks to maintain certain ratios of capital to their risk-weighted assets.
How many pillars are in Basel 2?
three pillars
Unlike the Basel I Accord, which had one pillar (minimum capital requirements or capital adequacy), the Basel II Accord has three pillars: (i) minimum regulatory capital requirements, (ii) the supervisory review process, and (iii) market discipline through disclosure requirements.