Operational Risk Management | Report1

Operational Risk Management
(FIN219)
Assignment
Assignment marks: 95 | Presentation marks: 5
Total marks: 100
Personal ID: [Enter your Personal ID]
I have read the Assignment Guide in the ‘General assessment information’ and have
applied the word count principles to my work.
My word count for this
assignment is:
[Enter your word count]
words
Your assignment should be loaded into KapLearn by 11.30 pm on the due
date.
All times are based on AEDT/AEST time zones.
Refer to ‘Time remaining’ on the ‘Assignment’ page in KapLearn to ensure
you submit your assignment by the specified due date and time.
Checklist
 I have completed my assignment using Word.
 I have completed my assignment using Calibri, Arial, Times New Roman or
Verdana fonts.
 I have added my Personal ID on this page.
 I have added my word count on this page.
 I have added my Personal ID in front of the filename in the footer on the second
page.
 I have saved the file to be uploaded as PersonalID_FIN219_AS_v11.
 Each question of my assignment is within the word limit guidelines for that
question as per the ‘General assessment information’ (Assessment  Assignment
 General assessment information).
 My assignment file size is no larger than 2 MB.
 If tables were required, they are visible as text, not as links or images.

 I have not removed the marking grid from the footer.
 I have submitted my assignment as per the instructions in KapLearn.
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Marker feedback
Comment on overall performance:
For marker use only.
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Instructions to students
• This assignment covers Topics 1 to 5 and accounts for 40% of your final grade.
• There are five (5) questions in this assignment. You should answer
all questions.
• Marks are awarded for assignment presentation and referencing.
• The overall word limit for the assignment is 4900 words. Marks will only be
awarded for answers up to the word limit (plus 10%) for each question.
Any material written after this will not be counted towards your mark for that
question. Headings, quotes and references within the body of the answer are
included in the word count. Numerical tables, calculations, and reference lists are
not included. For more information on word counts and their rationale, go to
Assessment  Assignment  General assessment information.
• Refer to the Criteria-based marking guide for guidelines on what is expected for
each question.
• The ‘General assessment information’ section in KapLearn contains information
about format and presentation, word limits, citations and referencing, collusion,
plagiarism and other policies, useful resources, submitting your assignment and
accessing your results.
• Full workings must be shown for all calculations. Show
all calculations in the text of
your assignment and NOT attached as an appendix. Appendices to assignments will
not be read.
• Answers are to be in your own words. Reference and cite all your sources (within
the text of your answer) when quoting or using material from external sources.
Include a reference list at the end of your assignment. Refer to the ‘Referencing and
Citations Guide’ available from the ‘Library Learning Hub’ in KapLearn.
• Indicative weightings are noted beside each question. Use these weightings to
assist you with your allocation of time and resources. The weightings indicate the
relative importance of each question.
• State
all assumptions used in providing your answer.
• Requests for special consideration or information pertaining to special consideration
written in the body of the assignment will not be considered by the marker. Refer to
the ‘special consideration’ section of the Assessment Policy on Kaplan’s website for
more information.
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Learning outcomes (LO) mapping Marks
1. Explain the regulatory framework for operational risk in Australia and
internationally. 25
2. Analyse operational risk using qualitative assessment methodologies
commonly used in Australia. 24
3. Analyse the different modelling methods used to measure operational
risk. 18
4. Assess the various ways to manage or mitigate operational risk. 18
5. Analyse operational risk in a financial institution. 10
Presentation marks 5
Total marks 0
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Assignment presentation and referencing (5 marks)
You are required to research beyond the subject notes in answering the questions in
this assignment. Reference and cite all your sources when quoting or using material
from external sources. Include a reference list at the end of your assignment.
You are required to:
• use appropriate presentation and format for your assignment
• demonstrate independent research and analysis
• demonstrate appropriate use of relevant references
• follow the Harvard referencing style as recommended in the ‘Referencing and
Citations Guide’ available from the ‘Library Learning Hub’ in KapLearn
• include a reference list at the end of your assignment following the recommended
referencing style
• adhere with the assignment word limit.
Criteria-based marking guide for presentation and referencing
The Criteria-based marking guide provided at the end of each question is designed to
assist students to understand what is expected of them in each question and to let
them know how their performance will be judged. It provides advice about the criteria
used in the marking of the question and what discriminates between an excellent,
satisfactory and unsatisfactory answer.
Excellent (Mark range: 4–5
marks)
Satisfactory (Mark range: 2.5–
3.5 marks)
Unsatisfactory (Mark range: 0–
2 marks)
• clear and appropriate
assignment layout and
structure
• clear evidence of independent
research and analysis
incorporated throughout
assignment
• appropriate use of referencing
• accurate use of Harvard
referencing style
• comprehensive reference list
provided at end of assignment
• adequate assignment layout
and structure
• some evidence of independent
research and analysis
• appropriate use of referencing
• use of Harvard referencing style
• reference list provided at end of
assignment
• poor assignment layout and/or
structure
• assignment is significantly under
or over the word limit
• no demonstrated independent
research or analysis
• no use of references
• referencing does not use Harvard
referencing style
• no or inadequate reference list
provided at end of assignment
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Question 1 (25 marks | Word limit: 1800 words)
LO1: Explain the regulatory framework for operational risk in Australia and
internationally.
In recent years, operational risk management has moved to the foreground. Bank
boards have recognised the significance of operational risk management and its effect
across the entire organisation. Rating agencies and shareholders have also recognised
its importance. Regulators have responded to the global financial crisis with Basel III.
(a) Examine the reasoning behind the Basel III reforms. (4 marks)
(b) Describe the major changes to the Basel framework since the global financial
crisis, including its impact on operational risk management. (9 marks)
(c) Discuss the approach taken by the Australian Prudential Regulation Authority
(APRA) in implementing Basel III requirements. (7 marks)
(d) Discuss five (5) major issues or challenges for banks and regulators in
implementing Basel III. (5 marks)Note: Your answer should focus primarily on operational risk. Support your discussion
using examples.
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Criteria based marking guide for Question 1
Excellent
(Mark range: 20–25 marks)
Satisfactory
(Mark range: 12.5–19.5
marks)
Unsatisfactory
(Mark range: 0–12 marks)
• comprehensive outline of Basel III
reforms
• at least 4 or more reasons for the
reforms mentioned with
comprehensive explanation
• comprehensive examination of how
Basel III will be implemented in
Australia and any differences
• comprehensive description of the
impact of Basel III on operational
risk management
• at least 5 or more major issues or
challenges in implementing Basel III
mentioned with comprehensive
description
• evidence of comprehensive
research and supporting references
• concise, logical and justified
conclusion with clear reasoning and
references within the word limit
• basic outline of Basel III
reforms
• at least 3 reasons for the
reforms mentioned with basic
explanation
• basic examination of how
Basel III will be implemented in
Australia and any differences
• basic description of the impact
of Basel III on operational risk
management
• at least 3 major issues or
challenges in implementing
Basel III mentioned with basic
description
• evidence of research and
supporting references
• logical conclusion with clear
reasoning and references
within the word limit
• little or no outline of Basel III
reforms
• little or no explanation of the
reasons for the reforms
• little or no examination of how
Basel III will be implemented
in Australia
• little or no description of the
impact of Basel III on
operational risk management
• little or no description of the
major issues or challenges in
implementing Basel III
• little or no supporting research
evident with poor referencing
or citing
• exceeds or significantly less
than word limit
For office use only
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PersonalID_FIN219_AS_v11 8 © Kaplan Higher Education