In a timely reminder that we can never become complacent about the consequences of operational risk the UK’s Serious Fraud Office has announced that two brokers have been charged with conspiracy to defraud in connection with the rigging of LIBOR rates. The LIBOR story which has already seen some banks face hefty fines is a prime example of the way in which adequate checks and balances are required not just to cover Black Swan events but to ensure that employees are sticking to the rules on a daily basis.
The new LIBOR rate setting body, NYSE Euronext Rate Administration, is due to take up its duties in 2014. Using a mix of direct reporting and monitoring of transaction data the body will be subject to the control of the Financial Conduct Authority.
Elsewhere, the UK’s Intelligence and Security Committee has issued its annual report for 2012-13. Amongst other matters the report highlights the risk of cyber attack which it says is at the highest level ever seen. Accompanying the report the press release warns that “the theft of intellectual property, personal details and classified information causes significant harm, both financial and non-financial. It is incumbent on everyone – individuals, companies and the government – to take responsibility for their own cyber security”. Cyber security has moved from the occasional loss of a laptop to a permanent ongoing threat and the report is a reminder of the need to remain constantly vigilant and to instil a culture of operational risk awareness in everyday procedures.
If you want to learn more about the latest trends in operational risk you can attend a Eureka Financial course on Operational Risk in London & Dubai.
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