A Nonlinear Analysis of Operational Risk Events in Australian Banks

21 Pages Posted: 27 Jan 2017

See all articles by Yifei Li

Yifei Li

University of Wollongong - Sydney Business School

Neil Allan

University of Bristol

John R. Evans

Centre for Analysis of Complex Financial Systems

Date Written: January 26, 2017

Abstract

We propose a methodology applied to complex systems to analyze operational risk events in banks, with the objective of determining an understanding of the key characteristics and their relationships in initiating operational risk losses. We applied our methodology to operational risk losses in Australian banks over the period 2010-14. The analysis identified that there are a small number of characteristics that are common to many operational risk events, and these "level 1" characteristics are stable across time, which implies operational risk losses could be controlled by managing these characteristics. The methodology adds value to the existing analysis by identifying the main characteristics of operational risk events in a rigorous manner.

Keywords: operational risk, cladistics analysis, risk management, Australian bank operational risk events, management of operational risk, identification of operational risk drivers

Suggested Citation

Li, Yifei and Allan, Neil and Evans, John R., A Nonlinear Analysis of Operational Risk Events in Australian Banks (January 26, 2017). Journal of Operational Risk, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2906327

Yifei Li

University of Wollongong - Sydney Business School ( email )

1 Macquarie Place
175 Liverpool Street
Circular Quay, NSW 2000
Australia

Neil Allan

University of Bristol ( email )

University of Bristol,
Senate House, Tyndall Avenue
Bristol, BS8 ITH
United Kingdom

John R. Evans (Contact Author)

Centre for Analysis of Complex Financial Systems ( email )

PO Box 363
Summer Hill, 2130
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
1
Abstract Views
337
PlumX Metrics