Banking stability continues to receive heightened attention since the Global Financial Crisis, circa 2008. Much of this attention has been focused on the prevention of future systemic crises. Notwithstanding the importance of these preventative efforts, it is important to understand the...

The 2004 Basel II accord requires internationally active banks to hold regulatory capital for operational risk, and the Federal Reserve's Comprehensive Capital Analysis and Review (CCAR) requires banks to project operational risk losses under stressed scenarios. As a result, banks subject to...