Professional Operational Risk Manager (ORM) Designation

Updated April 18, 2022

Reference Resources

The following references are being used to develop the Professional ORM Designation exam program. Candidates are responsible for securing copies of the resources they feel are necessary to study from. 

Reading List*

Individuals seeking the Professional ORM Designation should consider the following reading list and how each will help them best prepare for the exam program.

*This reference is not complete nor comprehensive. As the item development working group completes its work to create an initial question pool for 2022, the list will be updated and published for all current and future candidates to use in preparation for the exams.

  • Ashby, Simon. Fundamentals of Operational Risk Management: Understanding and Implementing Effective Tools, Policies, and Frameworks. KOGAN PAGE, 2022. ISBN 1398605026
  • Birindelli, Giuliana, and Paola Ferretti. Operational Risk Management in Banks: Regulatory, Organizational and Strategic Issues, Springer, 2017. ISBN/EAN 1137594527, 9781137594525
  • Camilleri, Mark Anthony. Corporate Sustainability, Social Responsibility and Environmental Management: An Introduction to Theory and Practice with Case Studies. Springer International Publishing, 2018. ISBN/EAN 3319836005, 9783319836003
  • Chapelle, Ariane. Operational Risk Management: Best Practices in the Financial Services Industry. John Wiley & Sons, 2019. ISBN/EAN 1119549043, 9781119549048
  • Crouhy, Michel, Galai, Dan, and Mark, Robert. The Essentials of Risk Management, Second Edition. McGraw-Hill, 2014. ISBN/EAN 0071818510, 9780071818513
  • Girling, Philippa X. Operational Risk Management: A Complete Guide for Banking and Fintech. Wiley Finance: 2022. ISBN/EAN 1119836042, 9781119836049
  • Grimwade, Michael. Ten Laws of Operational Risk: Understanding its Behaviours to Improve Its Management. John Wiley & Sons, Incorporated, 2021. ISBN/EAN 1119841380, 9781119841388
  • Howitt, Jonathan (Ed), Professional Risk Managers’ Handbook Series: Risk Management Frameworks and Operational Risk, Volume III, Book 1. Northfield, MN. PRMIA, 2015. ISBN13 9780976609780
  • “H.R.3763 - 107th Congress (2001-2002): Sarbanes-Oxley Act ...” Accessed February 4, 2022. https://www.congress.gov/bill/107th-congress/house-bill/3763 .
  • Pompon, Raymond. IT Security Risk Control Management: An Audit Preparation Plan. Apress, 2016. ISBN/EAN 1484221400, 9781484221402
  • “COBIT: Control Objectives for Information Technologies.” ISACA. Accessed February 4, 2022. https://www.isaca.org/resources/cobit .
  • COSO Framework, Guidance. https://www.coso.org/Pages/guidance.aspx .
  • “Risk Review - 2021.” FDIC. https://www.fdic.gov/analysis/risk-review/2021-risk-review.html.
  • Tipton, Harold F., and Micki Krause Nozaki. Information Security Management Handbook. Boca Raton: Auerbach, 2019.

*This reference is not complete nor comprehensive. As the item development working group completes its work to create an initial question pool for 2022, the list will be updated and published for all current and future candidates to use in preparation for the exams.

Standards and Practices

Candidates for the ORM Designation program should be knowledgeable of the following standards. The application of these standards in real world situations will be assessed as part of the ORM Designation exam program.


PRMIA Institute Papers

PRMIA Case Studies

The following PRMIA case studies have been identified by the PRMIA Education Committee as being important for the ORM Designation Pilot Examination.

Additional case studies will be published on an ongoing basis for the ORM Designation examination program. Current ORM Designation candidates will receive notification via email from [email protected] for all updates study materials.

Case Studies

Barings Brother

  • Unauthorized trading in derivatives by Nick Leeson in its Singapore subsidiary completely wiped out the bank’s capital of £200 million
  • Failures: No segregation of duties. Internal audit report not heeded. Doubts raised by Singapore Futures Exchange (SIMEX) ignored. Excessive profits not investigated.
  • Summary: Barings Brothers, a venerable London institution, was plunged into bankruptcy in February 1994 due to the actions of a rogue trader from the Singapore office named Nick Leeson. Due to managerial failures, Leeson was in charge of both the front and back offices, leaving him without supervision. At first he made large profits for the bank, but losses soon followed. He secreted these losses away in a bank account named 88888.

    Leeson gambled on an increase in the markets to make up for his losses. But the large Kobe, Japan earthquake on January 17, 1995 caused the stock markets to fall, and the losses he had incurred quickly rose. In February 1995 Leeson fled the country. Three days later Barings Brothers was forced into bankruptcy. Leeson went to prison for fraud.
Wells Fargo
  • Reputational risk related to unauthorized policies
  • Summary: The financial crisis of 2007/2008 began in the United States due to the collapse of the housing market. Subprime mortgages issued by numerous financial institutions, including Wells Fargo, fueled the housing market crash, leading to an economic downturn called the Great Recession, and threatening to destroy the international financial system. Federal government agencies have fined Wells Fargo about $3 billion for their behavior in the crisis, which also included defrauding the Federal Housing Administration (FHA) to insure improper mortgages.

    In 2016, a Senate committee grilled top Wells Fargo executives about their actions in a scandal involving the creation of at least 3.5 million bank accounts without their customers knowledge or agreement, leading to improper fees, deleterious credit reports, and misuse of private information. In early 2018, citing dissatisfaction with Wells Fargo’s progress in reforming its risk controls and leadership, the Federal Reserve ordered Wells Fargo to limit its assets to $1.95 trillion. As of September 2021 the bank has been issued more than $5 billion in fines and penalties by the government.

    While Wells Fargo has made numerous steps to redeem its behavior, including management changes, centralizing their financial system, and rebranding, its involvement in other scandals that continue to be revealed. Regardless of this, Wells Fargo continues to be highly profitable and ranked as one of the US’s largest companies.
Citibank
  • Transaction processing - 900M payment made due to manual errors
  • Summary: Citibank agreed to serve as the Administrative Agent for a syndicated loan for cosmetic company Revlon in 2016 for the loan amount of $1.8 billion. On August 11, 2020, Citibank intended to wire Revlon’s creditors an interest payment of $7.8 million. Instead, due to human error, it wired the full amount of the loan’s balance, about $900 million to the creditors. After requesting a return of the funds, ten of Revlon’s lenders kept the payment, arguing that it was due to them due to the loan’s terms.

    Citibank took the creditors to court and on February 16, 2021, lost the ruling, which stated that a previous case had set precedent for whether the mistaken overpayment should be returned. That case required that the lender’s were due a bona fide debt, which they were. Citibank, therefore, lost a total of about $500 million to this error.
Deutsche Bank
  • Details will post soon
  • Weak risk management practices

Enron

  • Details will post soon
  • Role of the board and governance in shareholder safety
JP Morgan
  • Details will post soon
  • London Whale Trader

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