OM-8.1.2
Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events which includes but is not limited to, legal risk1 and Shariah compliance risk. This definition excludes strategic and reputational risk.
Added: October 2012
1 Legal risk includes, but is not limited to, exposure to fines, penalties, or punitive damages resulting from supervisory actions, as well as private settlements.