The collapse of a bank like IndyMac or Washington Mutual bears some resemblance to an airplane crash: Both occur suddenly, drive a lot of people crazy on the way down, and leave a lot of wreckage lying around. Now a group of banks is pooling information, like the airlines, by developing a system to share data on financial institutions' problems and crises, in the hopes of being better able to avoid such events in the future.
"We've developed a system, operated on the OpenPages platform, for our member banks to report loss data resulting from operational risk–for example fraud, lawsuits, data loss, a big fire, etc.–and to examine that data and learn from it," says Simon Wills, executive director of Operational Riskdata eXchange Association (ORX), a Swiss-based nonprofit organization representing 52 banks in North America, Europe, South America and Africa.
The ORX database, Wills reports, now contains 115,000 separate loss events, whose value totals a whopping 38 billion euros, or about U.S. $51 billion. Participants range from relatively small institutions to such large banks as HSBC and JPMorgan Chase.
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