A review of operational risk in banks and its role in the financial crisis

The role of operational risk in the 2007/2008 financial crisis is explored. The factors that gave rise to the crisis are examined and it is found that although the event is largely regarded as a credit crisis, operational risk factors played a significant role in fuelling its duration and severity....

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Published in: South African journal of economic and management sciences Vol. 16; no. 4; pp. 364 - 382
Main Authors: De Jongh, Riaan, Van Vuuren, Gary, De Jongh, Dawie, De Jongh, Erika
Format: Journal Article
Language: English
Afrikaans
Portuguese
Published: Pretoria University of Pretoria 01-01-2013
AOSIS
Subjects:
G21
G32
G46
Online Access: Get full text
Summary: The role of operational risk in the 2007/2008 financial crisis is explored. The factors that gave rise to the crisis are examined and it is found that although the event is largely regarded as a credit crisis, operational risk factors played a significant role in fuelling its duration and severity. It is concluded that, from an operational risk perspective, 2008 was the worst on record. Considering the extensive role of operational risk in global financial calamities, suggestions are made to improve the management of this risk type.
ISSN: 1015-8812
2222-3436
2222-3436
DOI: 10.4102/sajems.v16i4.440