From Operational Risk to Operational Excellence

18 Pages Posted: 20 Jul 2003

See all articles by Paolo Vanini

Paolo Vanini

University of Basel

Markus Leippold

University of Zurich; Swiss Finance Institute

Barbara Doebeli

Swiss National Bank, International Monetary Relations


In this paper operational risk is considered from a purely business or profitability point of view. We show for quantifiable operational risk that the three basic figures for profitability management - value, costs and risks - can be modelled such that an integrative point of view on profitability over the value chain is possible. To achieve this goal, we specify the general dynamic and stochastic model and consider an IT-network case study. The case study shows how neglecting the operational risk dependence structure or the counter-measures leads to distorted and misleading risk and cost figures, respectively.

Keywords: Profitability, Operational Risk Management, IT-networks, Stochastic Systems

JEL Classification: C19, C69, G18, G21

Suggested Citation

Vanini, Paolo and Leippold, Markus and Doebeli, Barbara, From Operational Risk to Operational Excellence. Available at SSRN: or

Paolo Vanini (Contact Author)

University of Basel ( email )

Petersplatz 1
Basel, CH-4003

Markus Leippold

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4

Barbara Doebeli

Swiss National Bank, International Monetary Relations ( email )

Borsenstrasse 15
CH-8022 Zurich
+41 1 631 37 27 (Phone)
+41 1 631 39 80 (Fax)

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