Groundlearn / Glossary / Operational risk
Operational risk
A FRM term, defined in plain English with the distinction examiners test.
What it means
The risk of loss from failed internal processes, people and systems, or from external events. Includes legal risk; excludes strategic and reputational risk.
The exam angle
That exclusion is the Basel definition and is examined directly.
Where it appears in the syllabus
- Operational Risk & ResilienceFRM Part II · exam weight 20% · RCSA and loss data, model risk, cyber, third parties, financial crime, Basel.
Related terms
- Model riskThe risk of loss from using a model that is wrong, or right but used outside the conditions it was built for.
- Rogue tradingUnauthorised positions concealed by an employee, typically enabled by weak separation between the front and back office.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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