Operating risk

(redirected from Operating Risks)

Operating risk

The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk.

Operating Risk

Risk from sources other than inadequate funding (credit risk) or a change in market factors (market risk). Basel II defines operating risk as the "risk of loss resulting from inadequate or failed internal processes, people and systems or from external events." Thus, operating risk may come from mundane sources such as incompetent personnel or miscommunication between a buyer and a seller, or it may stem from events beyond a firm's control, such as terrorism, damage to goods in transport, or even a sudden drop in demand. Because it is not (primarily) financial, it is the most difficult type of risk to quantify. Sometimes, operating risks are predictable; for example, a farmer can prepare for a drought that would harm his/her harvest and therefore profits. On the other hand, risk from an employee's fraud is often impossible to anticipate. Consultancies often offer operating risk management, identifying and attempting to eliminate it as much as possible. See also: Political risk, Reputational risk.
References in periodicals archive ?
With this information, Safety Advisor can provide contextual insight into past, present, and future operating risks based on real-time operating conditions.
Safety Advisor is the only solution on the market that consolidates and contextualises past, present and future operating risks and performance data for the entire enterprise across multiple sites and geographies.
The withdrawal is based on Fitch's assessment that the issuer is no longer subject to any operating risks based on the provisions of its long-term operating lease agreement with a third party to operate the North Texas Medical Center (NTMC).
The purpose of this consultation is to provide insurance services for the operating risks of the universit panthon assas paris ii.
This gold royalty and streaming company's business model provides investors with gold price and exploration option with less exposure to operating risks. It has no debt and uses its free cash flow to expand its portfolio and pay dividends.
The plant is operating within design parameters, removing copper from solution, which aids in managing operating risks associated with reagent consumption and gold recovery.'
The group currently has more than ten units and it is expected that the streamlining move would reduce lending and operating risks.
The key rating sensitivities are the management's ability to deal with the construction and operating risks and the timely commissioning of the project.
The book contains definitions of terms and concepts, examination of major ideas, and step-by-step instructions for applying techniques, with explanations of the relationship of risk and return, categorizing financial risk, analyzing operating risks, determining the value of common stock, and optimizing debt in the capital structure.
Concessions are contracts whereby a public authority designates a third party with total (or partial) responsibility for an economic activity that normally comes within the authority's responsibility and for which this third party assumes operating risks. EU law does not contain a general definition of concessions or specific rules applicable to them (apart from works concessions, to which certain rules of the 2004 directive on public works contracts apply).
SeaTiger Capital should provide the opportunity to source more prospects for financial investments in areas where we have considerable knowledge of both the assets and the related operating risks."
"Taishin Bank continues to enhance its implementation of risk management policies to manage credit, market and operating risks," said Justin Tsai, general manager of Taishin's wholesale banking group.
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