Operational risk management had been defined in the past
as all risk that is not captured in market and credit risk management
programs. Early operational risk programs, therefore,
took the view that if it was not market risk, and it was
not credit risk, then it was operational risk. However, today
a more concrete definition is used, for example the Basel II
definition of operational risk is:
Operational risk is defined as the risk of loss resulting
from inadequate or failed processes, people and systems
or from external events. This definition includes legal risk,
but excludes strategic and reputational risk.