Is the hybrid method more adequate for measuring operational risk?
Lena Farsiah,
Euis Amalia,
Desmadi Saharuddin
et al.
Abstract:Research aims: Risk management in financial institutions struggles with setting suitable capital charges for operational losses, resulting in large, disproportionate reserves that impact profits. This study, therefore, aims to develop a tailored operational risk measurement model for general takaful companies, addressing this challenge and optimizing capital allocation.Design/Methodology/Approach: This study employed a hybrid approach, merging the loss distribution approach (LDA) with historical data and scena… Show more
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