Global Regulators Assessments on Operational Risk Management, International Fines and Sanctions Violations
Keywords:operational risks, AML, moral hazard risks, fines, sanctions
This study proposes to examine and review the responses from international regulators in relation to operational risk management. This review also seeks to measure the effect management support has in influencing and improving these four outcomes, namely; the safety of assets and infrastructure, customer satisfaction, cost reduction and employee performance. Further, it examines the record-breaking fines imposed on banking and financial institutions by global regulators, especially with regard to cases of fines for Anti-Money Laundering (AML) and sanctions violations, and considers recent operational risk loss events that have occurred on a global scale. In addition, certain issues identified in this study were valid enough to disclose a major moral hazard risk and operational risk implication to global banking and financial institutions. The results obtained from this study are pertinent owing to the operational loss and the reputational risks faced by nations in general and financial institutions in particular.