A conceptual model of operational risk events in the banking sector

Suné Ferreira and Zandri Dickason-Koekemoer

Cogent Economics & Finance, 2019, vol. 7, issue 1, 1706394

Abstract: Operational risk constitutes a large portion of a bank’s risk exposure. Unlike other financial risks, operational risk is classified as a pure risk (only an opportunity of a loss), as it always leads to a financial loss for a bank. The failure to mitigate and manage operational risk effectively during past operational risk events has led to the demise of several banks and other financial institutions. Operational risk has the possibility to lead to other bank risk and to influence the perceptions of the banks’ main stakeholder group i.e. depositors. The rationale behind profiling depositors’ behaviour during operational risk events will contribute toward constructing a revolutionised risk management model. A better indication of how depositors react during operational risk events may lead to better prediction of withdrawal risk within banks. Primary data was collected from 417 depositors in Gauteng, South Africa, using a self-structured questionnaire. Statistical techniques such as correlation and `significance tests were used in the statistical analysis. A positive relationship was found between depositor likelihood to withdraw during operational risk events for two of the three variables; bank perceptive and behavioural finance biases. A negative relationship was found between depositor’s likelihood to withdraw and their risk tolerance level.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/23322039.2019.1706394 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:oaefxx:v:7:y:2019:i:1:p:1706394

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/OAEF20

DOI: 10.1080/23322039.2019.1706394

Access Statistics for this article

Cogent Economics & Finance is currently edited by Steve Cook, Caroline Elliott, David McMillan, Duncan Watson and Xibin Zhang

More articles in Cogent Economics & Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().