Bank i Kredyt

Jacek Orzeł
A role of heuristic methods, especially the groups of experts' assessment, and subjective probability in the operational risk management

Heuristics methods, including the groups of experts' assessment, and subjective probability have an increasing meaning in practice in economy and science. One of their new uses is the area of the operational risk management. It is caused mainly by the present lack of quantitative methods to measure this category of risk in an easy way, but also by the lack of data about frequency and potential impact of events (threats), which is the reason of the risk. The other reason is specificity of the operational risk and its difference from the other categories of risks, e.g. financial risks.

Furthermore, the operational risk management is very popular nowadays. It is caused by the spectacular collapse of some firms through past years, the events of 11 September 2001 in USA and many other reasons like deregulation and globalising of financial services. Until working out some good, relatively simple, quantitative methods of measuring of the operational risks, using experts during risk management process will be essential.

The main problem connected with using of this type of methods to measure operational risk is wrong use of those ones.

There are many committed "sins" during implementation of the above methods, like the presence of non-experts in groups of experts.

While in the case of implementing subjective (personal) probability in practice, decisions makers do not remember about adequate interpretation of results obtained in such way. Approximate or inaccurate input data cannot give accurate and reliable output results.

The other problem is brought about the lack of knowledge of heuristic methods and the idea of the subjective probability.

In many cases the use of these methods causes that both of the results are strongly forged and their interpretations are wrong and can cause many mistakes in decision making process.

In the paper, we present suitable meaning of the above methods and the notion of the subjective probability. Moreover, we discuss fundamental principles for using these techniques and methods in a proper way in the area of the operational risk management.