This assignment delves into operational risk management, primarily focusing on the Basel III framework and its implications for the banking sector, particularly in Australia. The analysis begins with an overview of the Basel Committee's agreement on banking supervision and the evolution of the Basel III framework, including its objectives of enhancing risk capture, increasing capital quality, and improving bank liquidity. The assignment examines the changes implemented due to the financial crisis, such as the use of internal models and the rise of risk sensitivity. It then explores the specific requirements and changes within the Basel III framework, including liquidity standards and capital increases. Furthermore, the assignment analyzes the impact of operational risk management, the importance of internal loss data, and the role of technology in mitigating risks. It also addresses the Australian Prudential Regulation Authority's (APRA) approach to implementing Basel III and the challenges faced by banks and regulators, such as data management, geographical issues, integrated approaches, and data auditing. Finally, the assignment identifies five types of operational risks affecting Australian banks due to technological advancements. The assignment provides a comprehensive understanding of operational risk management and its practical implications in the banking industry.
![[object Object]](/_next/static/media/star-bottom.7253800d.svg)
