Estimation of Operational Risks using Internal Measurement Method:
Volume 35, Issue 111, Pages 47-63
AbstractThe present study tackled the management and measurement of the operational risks in the Saudi Banks, as they are the most developed banks on the regional level and which apply the resolutions of Basil Committee for Banking Control concerning credit and market’s risks. Hopefully, the Saudi Banks will apply the operational risks’ management and measurement. The study, in its theoretical aspect, has sought to shed light on the nature and the types of the operational risks as well as its measurement approach. Furthermore, in the applied aspect, capital allotted to confront the operational losses for each Saudi –French and Al-Jazeera Banks that has been counted and showed whether they have abided the resolutions of Basil Committee for Banking Control via capital designated for confronting operational losses. In order to apply the research hypothesis, Monte Carlo simulation has been applied on the database of U.S Banks collected in WebPages. The research concluded that the Saudi – French Bank is committed to Basel 2 in accordance to the internal measurement approach and Al jazeera Bank is not committed to Basel agreement 2. 2.
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