This paper proposes a new framework to reduce the variance and uncertainty in the risk assessment process. Today, this process is susceptible to background noise from sources of human factor biases and erroneous measurements. Our new framework consists of deconstructing the likelihood of failure...

The New Basel Capital Accord presents a framework for measuring operational risk which includes four degrees of complexity. In this paper we focus on a mathematical description of the Loss Distribution Approach (LDA), being the more rigorous and potentially more accurate approach towards which...