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OM-1.3.2

Risk identification and assessment are fundamental characteristics of an effective ORMF. Effective risk identification considers both internal factors (such as the bank's structure, the nature of the bank's activities, the quality of the bank's human resources, organisational changes and employee turnover) and external factors (such as changes in the broader environment and the industry and advances in technology). Sound risk assessment allows the bank to better understand its risk profile and allocate risk management resources and strategies most effectively. Banks may use the classification categories contained in Appendix A for determining and classifying operational risk events.

Added: January 2020