(124 Total References)
Some of the speakers include Jay ...
Some of the speakers include Jay G. Newberry, managing director and head of operational risk, Citigroup; Eric Rosengren, executive vice president, Federal Reserve Bank of Boston; Joseph A. Sabatini, managing director, JPMorgan Chase, and chairman of ORX; Yousef A. Valine, executive vice president, Wachovia Corporation, and chairman of AMA Group; Mick Leonard, executive general manager, Commonwealth Bank of Australia; and Penny Cagan, managing director, Algorithmics.
Featured speakers include Roger Cole, ...
Featured speakers include Roger Cole, director, supervision and regulation, Federal Reserve System; Jay G. Newberry, managing director and head of operational risk, Citi; Joseph A. Sabatini, managing director, JPMorgan Chase and chairman of ORX, and Yousef A. Valine, executive vice president, head of institutional risk, Wachovia Corporation, and chairman the RMA Operational Risk Council.
Joseph A. Sabatini
...Joseph A. Sabatini Managing Director, JPMorgan Chase; Chairman of ORX
Jay Newberry, Managing Director and Head ...
Jay Newberry, Managing Director and Head of Operational Risk for Citigroup, and an RMA Director, will lead a panel discussion of Chief Operational Risk Managers, including Mick Leonard, Executive General Manager, Group Risk Management, Commonwealth Bank, Joseph Sabatini, Managing Director, JPMorgan Chase, and Chairman of ORX, and Yousef Valine, EVP, Wachovia Corporation, and Chairman of the AMA Group.
Joe Sabatini, Managing ...
Joe Sabatini, Managing Director and Global Head of Operational Risk at JPMorgan Chase, discusses the financial sector's appraisal of operational risk as a risk discipline.
...As Managing Director and Global Head of Operational Risk at JPMorgan Chase, Joe Sabatini has pedigree in this field, responsible for managing the firm's framework for the measurement and management of operational risk as well as serving as a board member for the Risk Management Association.Sabatini
distinguishes operational risk from its siblings in the context of financial services: "Unlike credit risk or market risk, where , by intention and design , we take that risk, try to manage it well and successfully earn a return, operational risk is a byproduct of our normal business processes," he
"People use 2000 as a benchmark time period in which some major financial institutions like our own began to think about operational risk as a risk discipline," says Sabatini
The beating heart of the framework is JPMorgan Chase's
control self-assessment process, which Sabatini
has variously referred to as "the most important element in our operational risk framework" and one that creates better awareness and ownership of risks.
The process consists of subject-matter experts from each of the business lines initially meeting to identify the key risks in their businesses, usually specific areas where something is most likely to go wrong.These are then divided down into smaller, sub-risk segments, processes and control functions that would be affected should the risk materialize.In essence, the system has induced a beneficial move from a ,blame culture' to a ,risk-orientation' regarding operational risk losses.
"A very noble goal for operational risk management is to create a ,no surprise' environment, and that is the backbone of the self-assessment effort," Sabatini
explains."If it is done well, you have identified the key risks, you have identified the controls that you have in place, you know what gaps exist, and business managers can therefore make informed decisions as to what resources to dedicate against those risks and any control gaps that exist."
There is an axiom of credit risk managers: they don't mind losses , they mind surprises.History has paid this old adage little respect however, and when the industry has suffered large losses in the past, too often they have indeed proven to be a surprise.For Sabatini
, this emphasizes why operational risk is an area for focus.
"We say that operational risk runs from the mail room through to the executive suite, and every one of our employees in some fashion is a generator , and, necessarily, a manager , of operational risk," says Sabatini
believes that the key for any operational risk manager is to work with the business managers to ensure that what you are doing is in reaction to demand-pull rather than supply-push."There is no doubt that business managers want to understand their operational risk better," he
Considering the financial service industry's relationship with this new risk discipline, Sabatini
concludes: "Recent history has shown us that operational risk is real and can be expensive.But if well-managed, I think we can maintain a good financial performance within normal boundaries."
Prior to his
role as Managing Director and Head of the Corporate Operational Risk Team for JPMorgan Chase
, Joe Sabatini
held a variety of positions within the company.These included serving as the firm's Senior Credit Officer, General Manager of the Singapore Office and Regional Head of Credit for Asia Pacific.He also was the Global Head of Credit Research and served for a time in Tokyo as the Head of the firm's M&A Advisory function.Before joining JPMorgan Chase in 1982, Sabatini had spent time in the Bank Supervision and Regulation Division of the Federal Reserve Bank of Cleveland and the Fitch Investors Service.He is a member of a number of industry forums related to operational risk, currently serving as Chairman of ORX, the Operational Risk DataExchenage Association, as well as serving as a board member for the Risk Management Association.