Operational risk is the broad discipline focusing on the risks arising from the people, systems and processes through which a company operates. It can also include other classes of risk, such as fraud, legal risks, physical or environmental risks.

Since the mid-1990s, the topics of market risk and credit risk have been the subject of much debate and research, with the result that financial institutions have made significant progress in the identification, measurement and management of both these forms of risk. However, it is worth mentioning that the near collapse of the U.S. financial system in September 2008 is a clear indication that our ability to measure market and credit risk is far from perfect.

Globalization and deregulation in financial markets, combined with increased sophistication in financial technology, have introduced more complexities into the activities of banks and therefore their risk profiles. These reasons underscore banks' and supervisors' growing focus upon the identification and measurement of operational risk.

The Guidelines introduce principles and implementation measures for the identification, assessment, control and monitoring of operational risk in market-related activities. In particular, they aims to highlight supervisory expectations relating to specific arrangements, procedures, mechanisms and systems in trading areas that could prevent or mitigate operational risk events.

Operational risk management differs from other types of risk, because it is not used to generate profit (e.g. credit risk is exploited by lending institutions to create profit, market risk is exploited by traders and fund managers, and insurance risk is exploited by insurers). They all however manage operational risk to keep losses within their risk appetite - the amount of risk they are prepared to accept in pursuit of their objectives. What this means in practical terms is that organisations accept that their people, processes and systems are imperfect, and that losses will arise from errors and ineffective operations. The size of the loss they are prepared to accept, because the cost of correcting the errors or improving the systems is disproportionate to the benefit they will receive, determines their appetite for operational risk.

A widely used definition of operational risk is the one contained in the Basel II regulations. This definition states that operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

By contrast it is relatively difficult to identify or assess levels of operational risk and its many sources. Historically organizations have accepted operational risk as an unavoidable cost of doing business. Many now though collect data on operational losses - for example through system failure or fraud - and are using this data to model operational risk and to calculate a capital reserve against future operational losses. In addition to the Basel II requirement for banks, this is now a requirement for European insurance firms who are in the process of implementing Solvency II, the equivalent of Basel II for the banking sector.

The Guidelines introduce principles and implementation measures for the identification, assessment, control and monitoring of operational risk in market-related activities. In particular, they aims to highlight supervisory expectations relating to specific arrangements, procedures, mechanisms and systems in trading areas that could prevent or mitigate operational risk events. Status: Final

The list of risks (and, more importantly, the scale of these risks) faced by banks today includes fraud, system failures, terrorism and employee compensation claims. These types of risk are generally classified under the term 'operational risk'.

These Guidelines provide guidance on the recognition of risk transfer instruments within the AMA. The Guidelines are structured in three main sections addressing first the general conditions that should be fulfilled for the recognition of operational risk mitigation instruments, both insurance contracts and Other Risk Transferred Mechanisms.

/Nemer Haddad

Operational risk is the broad discipline focusing on the risks arising from the people, systems and processes through which a company operates. It can also include other classes of risk, such as fraud, legal risks, physical or environmental risks.

Since the mid-1990s, the topics of market risk and credit risk have been the subject of much debate and research, with the result that financial institutions have made significant progress in the identification, measurement and management of both these forms of risk. However, it is worth mentioning that the near collapse of the U.S. financial system in September 2008 is a clear indication that our ability to measure market and credit risk is far from perfect.

Globalization and deregulation in financial markets, combined with increased sophistication in financial technology, have introduced more complexities into the activities of banks and therefore their risk profiles. These reasons underscore banks' and supervisors' growing focus upon the identification and measurement of operational risk.

The Guidelines introduce principles and implementation measures for the identification, assessment, control and monitoring of operational risk in market-related activities. In particular, they aims to highlight supervisory expectations relating to specific arrangements, procedures, mechanisms and systems in trading areas that could prevent or mitigate operational risk events.

Operational risk management differs from other types of risk, because it is not used to generate profit (e.g. credit risk is exploited by lending institutions to create profit, market risk is exploited by traders and fund managers, and insurance risk is exploited by insurers). They all however manage operational risk to keep losses within their risk appetite - the amount of risk they are prepared to accept in pursuit of their objectives. What this means in practical terms is that organisations accept that their people, processes and systems are imperfect, and that losses will arise from errors and ineffective operations. The size of the loss they are prepared to accept, because the cost of correcting the errors or improving the systems is disproportionate to the benefit they will receive, determines their appetite for operational risk.

A widely used definition of operational risk is the one contained in the Basel II regulations. This definition states that operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

By contrast it is relatively difficult to identify or assess levels of operational risk and its many sources. Historically organizations have accepted operational risk as an unavoidable cost of doing business. Many now though collect data on operational losses - for example through system failure or fraud - and are using this data to model operational risk and to calculate a capital reserve against future operational losses. In addition to the Basel II requirement for banks, this is now a requirement for European insurance firms who are in the process of implementing Solvency II, the equivalent of Basel II for the banking sector.

The Guidelines introduce principles and implementation measures for the identification, assessment, control and monitoring of operational risk in market-related activities. In particular, they aims to highlight supervisory expectations relating to specific arrangements, procedures, mechanisms and systems in trading areas that could prevent or mitigate operational risk events. Status: Final

The list of risks (and, more importantly, the scale of these risks) faced by banks today includes fraud, system failures, terrorism and employee compensation claims. These types of risk are generally classified under the term 'operational risk'.

These Guidelines provide guidance on the recognition of risk transfer instruments within the AMA. The Guidelines are structured in three main sections addressing first the general conditions that should be fulfilled for the recognition of operational risk mitigation instruments, both insurance contracts and Other Risk Transferred Mechanisms.

/Nemer Haddad

Don’t give them an excuse to mistreat you by not co-operating. Don’t give them an excuse to mistreat you by sticking out, by being too anxious. The thing is, the more anxious you are, the more anxious you end up making people. The more anxious you make people the more angry, the more dangerous, the more difficult you make them to deal with.

According to the police report, Berry told police that Castro forgot to lock the “big inside door” of the home on Monday, allowing her to escape. The screen door, however, was locked, but she was afraid to break it because she “thought Ariel was testing her.”

While the victim should act passive, he should be careful that he doesn't pass up a chance to escape if it presents itself. Usually after the initial first hours of the kidnapping the criminals will become careless if the victim has shown no signs of trying to escape. Unless the kidnapping victim is in immediate danger, he should bide his time and wait for a slip-up among the criminals and then use the opportunity to escape.

By kidnapping a foreigner, whose reactions you have no real ability to predict that’s adding an element that is uncontrollable and therefore more unattractive. Not only that, because kidnappers operate in their own environment they know what the government or the local law enforcements response is likely to be or not be.

Police arrived on the scene and went into Castro’s house. They checked the basement and walked to the second floor. The police report describes. “As we neared the top of the steps, Officer Espada hollered out, ‘Cleveland Police,’ at which time … Knight ran and threw herself into (Officer) Espada’s arms,” the report reads. “We then asked if there was anyone else upstairs with her, when (DeJesus) came out of the bedroom. “

No matter what you did, you end up tied up in the back of his van with duct tape all over you. How do you respond to this? You tell yourself to just breathe, and begin looking around fro something sharp to cut your tape with. You start hyperventilating, but eventually calm yourself down. You start screaming and trying to get your phone out You start freaking out, which causes you to hit your head on something and you pass out.

Never negotiate for yourself. I guarantee you’ll be the worst negotiator in the history of the world. Every hostage, in some point of their captivity, whether it’s after 24 hours or 24 months, feels as if they’ve been forgotten. You’ve got to have faith that there’s a lot of people on the outside dedicated to securing your release. The more you negotiate for yourself, the longer your captivity will be. It’s almost a rule – like a law of physics.



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/Nemer Haddad