Committee on Banking Supervision of the Bank of International Settlements - The Basel Committee

The Basel Committee, established by the central-bank Governors of the Group of Ten countries at the end of 1974, meets regularly four times a year.

The Committee's members come from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, United Kingdom and United States.

Operational Risk Framework - Financial Institutions – Gap Analysis and Due Diligence Review

We have pleasure in making available to our VISUAL Assurance™ users a knowledgebase template designed to enable you to efficiently assess the effectiveness of your operational risk policies and procedures based on the Basel Committee's "Sound Practices for the Management and Supervision of Operational Risk", published on February 2003.

The purpose of this publication, prepared by the Risk Management Group of the Basel Committee on Banking Supervision, is to outline a set of principles that provide a framework for the effective management and supervision of operational risk, for use by banks and supervisory authorities when evaluating operational risk management policies and practices. The Committee recognizes that the exact approach for operational risk management chosen by an individual bank will depend on a range of factors, including its size and sophistication and the nature and complexity of its activities. However, despite these differences, clear strategies and oversight by the board of directors and senior management, a strong operational risk culture and internal control culture (including, among other things, clear lines of responsibility and segregation of duties), effective internal reporting, and contingency planning are all crucial elements of an effective operational risk management framework for banks of any size and scope.

The Committee does not possess any formal supranational supervisory authority. Rather, it formulates broad supervisory standards and guidelines and recommends statements of best practice in the expectation that individual authorities will take steps to implement them through detailed arrangements - statutory or otherwise - which are best suited to their own national systems.

Documentation is embedded in the Knowledgebases and is accessed through the "Knowledgebase Information File" icon in an Assessment.