OPERATIONALRISK SCENARIOANALYSIS [PART4]
Updated: Sep 10
In this part, we are examining the projected losses resulting from operational risk scenarios. Our operational risk scenarios are derived from a sample of 19 firms that fall under the Investment Firms Prudential Regime (IFPR), which is the UK's implementation of the European Investment Firms Directive (IFD/IFR).
Based on our analysis of operational risk scenarios, we have found that of all operational risk scenarios from firms subject to IFPR, the "trading error" scenario has the highest expected loss amount (£1.4m), followed by "internal fraud", "mandate breach", and "reporting issue" scenarios, with expected loss amounts of £1.1m, £0.8m, and £0.8m, respectively.