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A new risk was born in the mid-1990s known as operational risk. Though its application varied by institutions—Basel II for banks and Solvency II for insurance companies—the idea stays the same. Firms are interested in operational risk because exposure can be fatal. Hence, it has become one of the major risks of the financial sector. In this study, we are going to define operational risk in addition to its applications regarding banks and insurance companies. Moreover, we will discuss the different measurement criteria related to some examples and applications that explain how things work in real life.

Recent technological advances and changes in the political and macroeconomic climate have inevitably changed the traditional features of the bank sector. Thus it is necessary for banks to adjust their services and products in order to achieve competitiveness in this new banking era. Competition is continuously increasing and banks will have to develop and include in their activities the majority of new financial instruments which have arisen from the newly emerged financial sector. Therefore it is quite clear that in the near future we will see the implementation of new technologies in the banking sector which will lead to differentiated objectives and further consolidation of the sector. ; peer-reviewed

A letter report issued by the General Accounting Office with an abstract that begins "Pursuant to a congressional request, GAO analyzed the efforts to improve the financial sectors of the emerging market countries of Indonesia, South Korea, and Thailand, focusing on: (1) the nature of weaknesses in the countries' financial sectors; (2) the extent to which the countries have achieved reforms in their financial systems; (3) the extent to which the countries have implemented international principles for banking supervision; and (4) U.S. government and multilateral institutions' efforts to effect changes in the financial sectors of these emerging markets."