Which of the following is not a type of operational risk as defined by Basel ll/lll?
A.Human error and internal fraud
B.Destruction by fire or other external catastrophes
C.Damaged reputation due to a failed merger
D.Failure or breakdown in internal control processes
Explanation:Basel ll/lll defines operational risk(inclusive of technological risk)as“the risk of direct or indirect loss resulting from inadequate or failed internal processes,people and systems of from external events.”Although a number of financial institutions add reputation risk and strategic risk(e.g.,due to a failed merger)as part of a broadened definition of operational risk,they are not within the scope of definition by Basel ll/lll.
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