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OTC Conseil Americas
Newsletter #15 - june 2010

Editorial

In all industries, particularly banking, operational risk has been of great concern for several decades. As included in the Basel II capital requirement, operational controls and compliance is a must.

Control, Risk Management, and assessment are musts for all an organization’s sake, but at what price?

At which point should control and performance be put together? It is easy to say, yet less easy to do.

In this month 's newsletter, we review this very topic with two articles:
> Operational risk approach based from Risk Management and Quality,
> Calculating capital to improving operational performance


As always, these articles are developed in further details on our website.
Have a good read!


Fayna Lionet
OTC Conseil Americas

Operational Risk Management and Quality

Operational risk management originated in the industrial sector and became vital to the financial sector following losses caused by failures of internal controls (Barings, Sumitumo, etc.).

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From calculating capital to improving operational performance

Regulators’ major concern has always been to avoid bank failures due to overexposure to risk. A direct way of limiting that risk entails forcing each bank to reduce the total amount of loans made according to its financial soundness, the latter measured by its capital holdings.

Six Sigma & Lean by Kairos Management

Six Sigma is a management and performance-enhancement system based on the utilization of data. Initiated by Motorola in the 1980s, popularized by General Electric in the 1990s.

Lean comprises a group of practices that came out of the Toyota Production system and were popularized by the Americans Womack and Jones in their book The Machine That Changed the World (1991).

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