1.This section of the guidance supports the Operational Risk Standard in clarifying the calculation of the Operational risk capital requirement.

2.Operational risk has existed since banks have been in business. However, it is only in recent decades that the management of operational risk (including measurement techniques) has evolved into a distinct discipline, long after this was the case for both credit risk and market risk.

3.In this same period, the significance of operational risk in banks became widely recognised. This development was influenced by numerous high-profile operational risk events and related losses, along with such factors as banks' greater reliance on technology and increased use of outsourcing, the growing sophistication of cyber threats, and the pace of change in the financial services sector.