KARACHI: The State Bank of Pakistan stressed the need for inculcating a risk culture with the organisation through opening communication channels between business lines and control function for sound management of operation risks.
While addressing the ‘Conference on operational risk management’ at the SBP Learning Resource Centre, SBP Governor Yaseen Anwar said SBP was cognisant of its responsibilities regarding the sound operational risk management frameworks in banks, according to a press statement.
Stressing the need for close cooperation between banks and the central bank, Anwar said that the exchange of ideas was very important in capacity building for operational risk management. He expressed hope that this conference will provide a good opportunity to exchange thoughts on risk management and learn from each other’s experiences.
Highlighting the importance of risk management, Anwar said that the SBP will expand its existing reporting mechanism in order to have comprehensive and current information on operational risk of banks.
SBP had adopted a two-pronged strategy for effectively addressing the issues of operational risks. Firstly, it seeks to update the existing instructions on frauds and forgeries and monitoring in banks and secondly, issuing guidelines on operational risk data collection to enhance the scope of loss data gathering in line with the Basel Accord requirements and to provide the industry with minimum set of instructions for consistent recognition of losses and their reporting to a centralised data consortium.
SBP governor observed that it was imperative for banks to develop requisite capacities to manage their operational risks, collect their loss data, implement risk indicators and set aside capital to cover potential operational risk losses.
Published in The Express Tribune, February 8th, 2013.
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