The research on the measurement and Early-warning of operational risk for commercial banks based on credal network analysis

The measurement, capital charge and early-warning of operational risk are extremely important components of the risk management for commercial banks. However, because of the diversity, complexity & uncertainty of the causes and factors, effective and scientific measurement and early-warning methods of operational risk becomes a major issue the commercial banks have to face now. Credal network is the extension of Bayesian network. Credal network method could analyze and get the joint probability interval of the formation nodes of risk factors to make use of the combination of quantitative and qualitative analysis methods. At the same time, this method could establish the Credal network direct acyclic graphs (DAG) of operation risks for commercial banks so as to propose the new reference model for the measurement and early-warning of operational risk.