The document outlines an operational risk management framework consisting of 4 main steps: 1) Risk identification which defines strategic objectives and identifies risks and controls, 2) Risk assessment which evaluates the gross risk and control effectiveness, 3) Risk measurement which calculates optimal capital allocation using various models, and 4) Monitoring and reporting which tracks key risk indicators, early warning signals, and reports findings using standardized or comprehensive methods.

1. I.
Operational risk management framework
Risk Risk Monitoring
identification
Risk measurement
assessment and reporting
Measure Reporting by
Reporting module
Assess internal
Standard]
[Basic,
Define strategic/ Financial accounting data
internal control controls and
RSA objectives (Control Effect score) monitoring Comprehensiv
Standard e reporting
Identify risk/ internal Assess risks Basic approach
approach
controls (Gross risk, average
(cause, event, effect) risk)
Risk Performance
Measure
Calculate culture management
Allocate
Derive potential optimum
capital
KRI capital
[AMA]
Manage and utilize
Risk control
KRI Select final KRI sbAMA LDA
/EWS KRI
Model Model
and mitigation
is indicated to:
Select EWS Scenario Internal External
Manage EWS
indices analysis loss data loss data 1. Set the tolerance level
2. Establish risk action plans
Loss Internal loss
in case the tolerance level
data collection
Data and DB setup is exceeded