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As mentioned above, Basel Accord II recognizes insurance as a risk mitigant in a limited way only. However, qualitatively a bank may always initiate the following elements as risk mitigates from its operational risk angle:

* Training and re-training of staff at all levels.

* Diversification of activities.

* Selective withdrawal from high risk products/activities.

* Outsourcing.

Operational risk monitoring implies, ensuring that each functional unit is in tune with the bank's risk philosophy, risk appetite and business transactions within the regulatory setting. Also, whenever any significant deviation is noticed, immediate remedial action is taken in the best interests of the organization.

6.8. Usual Components of a Sound Operational Risk Policy Document

A fully effective operational risk policy document must contain the following components:

a) Top management's involvement should be spontaneous and proactive. An operational risk committee with top management members and functional specialists must meet at least on a quarterly basis for monitoring the bank's operational risk segments.

b) Upon intensive study of operational risk content data and the intensity of each component in the previous 5-7 years, the top management should assess the areas requiring improvement, on a regular basis. For example, if some areas where the bank has its branches are regularly affected by flood, appropriate steps should be initiated for risk control. Such risk related findings should be placed before operational management committee from time to time and if need be, these should be escalated to the board of directors.

c) Specifying criteria, for identifying roles, responsibilities and inter-relationships of various functionaries involved in bank wide operational risk management.

d) State/area wise view of top management as to the intensity of impact of any particular type of operational risk e.g. in some parts of a country , risks related to external events may be more than internal process, system or people related risks.

e) Identification of the risk mitigant that the bank would like to have e.g. fidelity insurance for staff, bank's property insurance etc.

f) Decision on how frequently the bank's manual of instructions is to be updated-ideally it should be on annual basis. Loan policy/credit risk policy documents of banks are generally updated annually.

g) Specific arrangements are to be made for providing and enhancing the skills of the staff.

h) Reward/punishment measures for intentional/ deliberate mistakes are to be in place.

i) The extent to which the bank would avail of outsourcing of technology to deal with operational risks.

j) What specific arrangements should be in place by way of disaster recovery on account of accidental disruption or for other operational reasons so that business continuity is not seriously hampered.

k) How templates for operational risk reporting package co本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。