Operational Risk Came into Prominence During the Global Financial Crisis

question 38

Multiple Choice

Operational risk came into prominence during the global financial crisis (GFC) due to:

• A)Lehman Brothers using 'recycled collateral' to expand their funding beyond on-balance-sheet assets
• B)the classification of 'sophisticated investors' led to investment banks not providing material information about the riskiness of derivative transactions
• C)the credit default swap market was likely to cause systemic market risk due to difficulties in settling out trades with distressed or failed counterparties
• D)All of the listed options are correct.

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Definitions:

Confrontational Discipline

A disciplinary approach focusing on punitive measures to address and correct employee misconduct or behavior issues.

Employee Participation

Involvement of employees in decision-making processes within an organization, often related to work conditions, organizational policies, or the overall direction of the company.

Union Goals

The objectives that labor unions aim to achieve, including better wages, shorter work hours, and safer working conditions for their members.

Craft Unions

Labor organizations representing workers who share the same or similar skills in a particular craft or trade.