Unlike other causes of operational disruption like fires and floods, we know there are agents out there – criminals, terrorist organisations – that have the will, if not necessarily the means, to attack and exploit the system. Motivations vary. More often than not they are economic – to defraud banks or their customers or to extract information.
A robust pillar II approach would require significant and sustained supervisory pressure to ensure that banks continue to invest in improving their operational-risk assessments. Even then, comparability across banks would be difficult to achieve, undermining our efforts to attain a level playing field.