Introduction to Operational Risk and Resilience (FRM Part 2 2025 – Book 3 – Chapter 1)

Kick off FRM Part 2 (Operational Risk & Resilience) with Jim’s clear, exam-focused intro. We define operational risk (processes/people/systems & external events), review the BCBS framework, Basel II/III event categories, heavy-tail loss behavior, legal/strategic/reputational risk, and the core ORM cycle: identify → assess/measure → control/mitigate → monitor → report. We finish with operational resilience: impact tolerance, continuity/disaster recovery, third-party risk, cyber, and lessons learned. ► Study with AnalystPrep (FRM Part I & II video lessons, question bank, mocks, notes & formulas):https://analystprep.com/shop/unlimite... AnalystPrep is a GARP-Approved Exam Preparation Provider for FRM Exams After completing this reading you should be able to: Describe an operational risk management framework and assess the types of risks that can fall within the scope of such a framework. Describe the seven Basel II event risk categories and identify examples of operational risk events in each category. Explain characteristics of operational risk exposures and operational loss events, and challenges that can arise in managing operational risk due to these characteristics. Describe operational Resilience, identify the elements of an operational resilience framework, and summarize regulatory expectations for operational Resilience. #FRM #OperationalRisk #Resilience #RiskManagement #GARP #Basel #BCBS #FinancialRisk #ExamPrep #ScenarioAnalysis #StressTesting #RiskGovernance #BusinessContinuity #Cybersecurity #AnalystPrep