Operational Risk Disclosures in Financial Institutions
5 Pages Posted: 15 Feb 2007
Date Written: 2006
In this paper we examine the current disclosure standards of financial institutions with regards to their operational risk measurement and management systems. Our sample covers 57 financial institutions across five countries. We discuss our findings in light of the Basel II recommendations on risk disclosure. We find that there is currently high variability in the quality and quantity of disclosure on operational risk. We conclude that while it is likely that the Basel II requirements will lead financial institutions to disclose greater information on operational risk, the lack of consistency in the way financial institutions report this information places doubt over its usefulness to external parties.
Keywords: operational risk, disclosure, financial institutions
JEL Classification: G21
Suggested Citation: Suggested Citation