Worrying but accepting new measurements: the case of Swedish bankers and operational risk

Wahlström, Gunnar

doi:10.1016/j.cpa.2004.08.006

Cited by 29 publications

(31 citation statements)

References 61 publications

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“…This is consistent with the financial trading literature, where it is argued that without an effective and transparent risk escalation process (e.g. ensuring front-line personnel are willing to report problems), risk managers will struggle to measure, assess, control or manage the risks within the organisation (Bryce et al 2013;Wahlstrom 2006). In relation to the FNs, it appeared that the lines of supervision were blurred by complex and fragmented supervision and the coordination and communication of information was disrupted within and across the teams.…”

Section: Systems Implementationsupporting

confidence: 51%

Safety Culture in Financial Trading: An Analysis of Trading Misconduct Investigations

Leaver

Reader

2017

J Bus Ethics

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High-profile failures in financial trading have led to interest in how the culture of the industry produces risky and unethical behaviours among traders. Yet, there is no established theoretical framework for studying this: we apply safety culture theory to examine ten recent highprofile trading mishaps investigated by the UK financial regulator. The results show that the dimensions of safety culture (e.g. Management Commitment to Safety, Systems and procedures) used to understand organisational accidents in domains such as aviation also explain failures in Risk Management within financial trading organisations. This counters narratives focusing on traders who are unethical 'rule breakers', and emphasises the value of a systemic approach, whereby safety culture theory is used to explain why risky behaviours in financial trading occur. Safety culture therefore provides a conceptual basis for further research on risky and unethical behaviours in financial trading, alongside providing insights for possible intervention.

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Section: Systems Implementationsupporting

confidence: 51%

Safety Culture in Financial Trading: An Analysis of Trading Misconduct Investigations

Leaver

Reader

2017

J Bus Ethics

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“…For example, Hiwatashi (2002) and de Fontnouvelle et al (2006) both suggest that financial institutions are now treating operational risk as a homogenous risk category that can be managed and measured. Wahlstrom (2006) corroborates this by suggesting that a quantitative figure can make it easier to obtain sustainable resources for improving levels of staff development. Outwith the need to comply with regulation and internal support, one participant also mentioned that it is important: that in the industry, you provide evidence to regulators and shareholders, demonstrating that you have a robust control environment, you know what your risks are and you know how to manage them effectively, this can then be used positively in investments and acquisitions.…”

Section: Resultssupporting

confidence: 68%

“…To the authors' knowledge (and in agreement with Wahlstrom 2006;Schrand and Elliott 1998) there is a dearth of previous primary research in this area -which can be explained by the lack of any available data. As a result, our approach takes a primarily qualitative, inductive approach in order to provide crucial insights (see Yin 1994).…”

Section: Methodssupporting

confidence: 67%

Internal loss data collection implementation: evidence from a large UK financial institution

Bryce

Webb

Adams

2011

Journal of Risk Research

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The paper conducts a critical analysis of internal loss data collection implementation in a UK financial institution. We use elite semi-structured interviews, with a sample of 15 operational risk consultants from a leading international financial institution. Using content analysis, the data covers a wide range of business areas, with particular attention drawn towards the development of internal loss collection and operational risk management. The results suggest that the development of operational risk management as a function stems from external compliance (Basel II) and the internal pressure to add value to the business portfolio. This need for compliance was augmented as a driver of internal loss data collection; however, participants also recognised that the function of loss data collection is a tool of solid internal risk management and enhances managerial decision-making. The research also highlights the problems in cleansing data in order to ensure that all information implemented in the capital allocation model is valid and reliable.

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“…However, contrary to the recent thesis of Baud and Chiapello (2016), the regulators, in our case, still believed in self-regulation and hesitated to suggest a strict approach to the IA of risk culture (Power 1997(Power , 1999. The implementers, in contrast, promoted the status quo of IA avoiding costly implementations, fearing intervention in the profiteering activities by regulators (Wahlström 2006(Wahlström , 2009.…”

Section: Discussionmentioning

confidence: 56%

Manifold Conceptions of the Internal Auditing of Risk Culture in the Financial Sector

Sinha

Arena

2018

J Bus Ethics

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This exploratory study investigates the manifold conceptions of the internal auditing (IA) of risk culture prevalent among four influential actors of the financial sector-regulators, normalizers, consultants, and implementers. By inductive analysis of 20 interviews and 295 documents, we illustrate a two-step interpretive scheme utilized by the four actors in their IA approaches of risk culture: defining broad goals and designing visibility schemes. The visibility schemes were tied to the demarcation, measurement, as well as the IA data collection techniques of risk culture. Our results indicate two dichotomous interpretations among the four actors concerning the IA of risk culture. The first interpretation, prevalent among regulators and implementers, promotes the control of risk culture primarily through verification. The second interpretation, adopted by consultants and normalizers, promotes the control of risk culture by IA along with the empowerment of employees through training programs. Our results not only contribute to understanding IA expansions, specifically to non-tangible domains such as risk culture but also enrich the literature exploring the mechanisms different stakeholders utilize to shape weakly professionalized IA practices.

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Worrying but accepting new measurements: the case of Swedish bankers and operational risk

Cited by 29 publications

References 61 publications

Safety Culture in Financial Trading: An Analysis of Trading Misconduct Investigations

Safety Culture in Financial Trading: An Analysis of Trading Misconduct Investigations

Internal loss data collection implementation: evidence from a large UK financial institution

Manifold Conceptions of the Internal Auditing of Risk Culture in the Financial Sector

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