The Analysis of Possible Uses of Alternative Risk Transfer Methods in Poland in the Context of Operational Risk Reduction
The Analysis of Possible Uses of Alternative Risk Transfer Methods in Poland in the Context of Operational Risk Reduction

Summary/Abstract: The main aim of this publication is to analyse possible uses of Alternative Risk Transfer (ART) methods in Poland in the context of operational risk reduction. Traditional methods of operational risk reduction – namely insurance – have many drawbacks, among them a frequent lack of the full coverage of losses, uncertainty as to the speed and adequacy of compensation, and high costs. However, a new approach to extreme risk, Alternative Risk Transfer, was created, mainly employing risk-financing techniques that originated in the banking sector’s approach to securitisation and conditional capital accessibility. These types of instruments make it possible to transfer operational risk to the deep capital market.

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