Capital Charge for Operational Risk: From Legacy Approaches to the New Standardized Paradigm

Risk Management

Operational risk capital ensures that banks can absorb losses arising from process failures, people, systems, or external events, with Basel’s current framework centering on a standardized, data-driven approach anchored in business indicators and internal loss experience. This article outlines definitions, methodologies, legacy approaches (BIA/SA/AMA), key shortcomings, and the new standardized approach with business indicators, risk-weighted…

Regulatory Capital and Capital Adequacy: From Accounting Residuals to Basel III Risk Standards

Risk Management

Regulatory capital ensures banks can absorb losses while continuing to serve the economy, evolving from simple balance‑sheet residuals to risk‑sensitive frameworks under Basel III that cover credit, counterparty, market, and off‑balance sheet risks comprehensively. Capital adequacy today blends risk‑weighted requirements with leverage and liquidity backstops, using standardized and internal model approaches bounded by output floors…

Global Financial Crisis and Basel III: How Regulation Evolved

Risk Management

The Global Financial Crisis (GFC) exposed critical gaps in bank capital, liquidity, risk management, and oversight; Basel III was the international regulatory response to harden bank balance sheets, curb procyclicality, and improve resilience through higher-quality capital, liquidity standards, and systemic safeguards. The reforms reframed prudential policy around loss absorbency, credible buffers, and robust supervision to…

Risk Governance for Climate Resilience and Green Finance in Banking

Risk Management

India’s banking sector is integrating climate risk into core risk governance, aligning with Basel principles and emerging RBI frameworks on disclosures and green finance to safeguard stability and accelerate sustainable development. Climate in India India faces high exposure to physical climate risks—extreme heat, floods, cyclones, and erratic monsoons—with systemic implications for credit, liquidity, and operational…

Corporate Governance in Banking: Principles, Practices, and Global Benchmarks

Risk Management

Corporate governance has emerged as a cornerstone of sustainable growth and trust in the banking sector. Sound governance ensures that banks safeguard depositor interests, maintain strong internal controls, and balance profitability with systemic stability. With the growing complexity of financial systems, regulators worldwide have laid increasing emphasis on governance frameworks to protect the integrity of…

Information Security, Cybersecurity, and Technology Risk Management in Modern Banking

Information Technology, Risk Management

The financial services sector today faces a rapidly evolving landscape of risks, largely driven by digitization, proliferation of electronic delivery channels, and rising sophistication of cyber threats. Banks and financial institutions must embed robust information security practices, adopt advanced technology safeguards, and frame resilient business continuity measures to protect customers, stakeholders, and the wider financial…

ISO 27001-Aligned Technology Risk Practices: From Patching to DDoS Defense

Information Technology, Risk Management

Organizations can materially reduce technology risk by enforcing disciplined lifecycle controls across change, access, monitoring, and vendor ecosystems, aligned to ISO/IEC 27001:2022 and NIST guidance. Patch management Change management Audit trails Security reporting and metrics Vendors and critical service providers Network security Remote access DDoS/DoS mitigation Implementing ISO/IEC 27001 Operational Risk Articles related to Model…

Technology Risk and Information Security: Principles, Governance, and Protection

Uncategorized

In today’s digital-first world, technology risk has become a critical concern for every organization. The growing dependence on information systems, connectivity, and data-driven decision-making brings immense opportunities—but also exposes enterprises to cyber threats, data breaches, and systemic vulnerabilities. Information security (InfoSec) forms the backbone of managing technology risk and ensuring resilience against the ever-changing threat…