![]() Together, the Cause and Impact and Event Type Taxonomies will provide operational risk teams with a practical resource to support the management of operational risk. Luke Carrivick, Director of Research & Information, ORX Download the ORX Reference Taxonomy This extra information will help improve the industry’s understanding of the operational risk environment.” By covering causes and impacts, this new extended version allows firms to add crucial context to their data. "The ORX taxonomy has the potential to benefit the entire industry. The Cause and Impact Taxonomy provides definitions and examples to support understanding of the cause and impact categories, while the accompanying guidance helps financial organisations better understand how to use it. Using data from our member firms as the key input, we've developed reference cause and impact categories to level 2. Thanks to our position as a membership association, we were able to bring together information and experts from a range of financial organisations worldwide to develop the new taxonomy. ![]() Using information from financial firms around the world So, in 2020 we worked with Oliver Wyman (who also supported us with the Event Type Taxonomy) to create the Cause and Impact Taxonomy. Our work so far has been well received and recognised by the operational risk industry, with our initial groundwork winning initiative of the year at the 2019 Operational Risk Awards and the Event Type Taxonomy having been downloaded over 2,000 times since it was launched.Īfter publishing the Event Type Taxonomy, it became clear to us that an additional taxonomy, focusing on cause and impact categories would support the industry further and help them use the taxonomy. To do this, we need a taxonomy that includes more 'contemporary' risks – such as cyber and conduct – while not moving completely away from the Basel Event categories. A new bank-led system for categorising operational risks, developed by industry consortium ORX, reflects the increased importance being accorded to risks outside traditional market and credit risk parameters since the publication of the Basel Committee on Banking Supervision’s taxonomy. Since 2018, ORX has been working on creating a taxonomy for operational and non-financial risk which reflects the environment that we are working in today. Creating a taxonomy for today's risk landscape The new taxonomy, which was published on 24 November 2020, complements ORX Event Type Taxonomy which was released last year. We've delighted to announce that we've extended the ORX Operational Risk Reference Taxonomy to include a new Cause and Impact Taxonomy.
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