BASEL II: Impact on IT Systems & Testing for Compliance
Explaining Financial IT Compliance
Once BASEL II is implemented, operational risk will feature directly in the assessment of capital adequacy for the first time.
Operational risk as defined by BASEL II is ‘The risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events’. This will include legal risk, however, it should be noted, strategic and reputation risks are currently out of scope.