Operational risk is possibly the largest threat to financial institutions. The operational risk that financial institutions face have become more complex, more potentially devastating and more difficult to anticipate. The Credit Crunch indicates that operational risk does not lend itself to traditional risk management approaches. This is because almost all instances of operational risk losses result from complex and nonlinear interactions among risk and business processes. In this book we focus on an alternative to improve operational risk management that is more effective, efficient and satisfying.

Many people and several organizations supported me to achieve the content required for this second revised edition. Special thanks to drs. Wilfred Geerlings, ir. Jeroen Schuuring and dr. ir. Corné Versteegt for being friends and for the constructive discussions we had. Last, but certainly not least, I want to thank my family for their love and support.

Jürgen van Grinsven,

Hedel, April 2009