Thus, effective risk management requires financial institutions to have moreknowledgeable employees to identify system requirements, monitor their effectiveness, and interpret model results appropriately. We have learned quite a bit about operational risk from our examinations of banking organizations. For example, during routine examinations we look at the adequacy of banks' procedures, processes, and internal controls.
Such reviews include transaction testing of control routines in higher-risk activities. For example, a bank's wire transfer activities and loan administration functions are often targeted for review, and our experiences have identified some common weaknesses in operational control that are worthy of attention.