In this paper, we propose a general continuous-time stochastic-modeling framework where a financial firm offers incentive bonuses to a team of employees, who would thus exert effort to reduce operational risk losses. We characterize employees' Nash equilibrium efforts and the firm's optimal...

The financial services industry differs from other service industries in ways that affect the nature of the operational risks it is subject to. In recent decades, many books and papers have focused on operational risk in financial services. However, the literature has focused mainly on the...

Operational risk has been among the three most significant types of risks in the financial services industry, and its management is mandated by Basel II regulations. To inform better labor decisions, this paper studies how workload affects banks' operational risk event occurrence. To achieve...