Operational Risk Management (ORM)

Public debt managers are exposed to a wide range of potential risks that could be categorized in two main areas: financial risks and operational risks. Financial risks, such as interest rate risk and currency risk, are central to developing and maintaining a debt management strategy grounded in cost-risk analysis. As such, public debt managers spend a considerable amount of effort identifying, evaluating and mitigating those risks. Awareness of operational risks is often less developed. Operational risks are typically broader in scope and are not only concerned with government debt offices. However, their impact can be significant for public debt managers given the volume of financial transactions and payments performed on a daily basis.