This paper considers the regulatory environment that may emerge once immediate priorities in responding to COVID-19 diminish. It then investigates key operational and non-financial risks likely to emerge as FIs reshape and their implications for risk quantification. The research undertaken explores the relationship between operational/non-financial risk losses and financial crises. Using OpBase loss data, spanning a period of more than 30-years, a clear correlation can be identified between movements in equity indices, caused by economic shocks, and losses in fraud, conduct and execution risks. Finally, the valuable role insurance can play in mitigating loss volatility and tail risks associated with key non-financial risks is discussed, as well as latest market developments.
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