Service Group in Brazil

Operational Risk

Operational risk is defined as the possibility of losses resulting from failure, deficiency or inadequacy of internal processes, people and systems or from external events. This definition includes the legal risk associated with inadequate or deficient contracts signed by the conglomerate, with penalties due to noncompliance with laws, and with compensation for third-party damages arising from activities carried out by the conglomerate.

Organizational structure

The Operational Risk Management unit is accountable to the Chief Operating Officer and the head of the group reports to the Operations Board. In addition to reporting locally to the Operations Board, this unit has a functional reporting line to the Operational Risk Management (ORM) group, located in New York.

The established structure helps to identify, monitor, measure and report operational risks. The main reponsibilities of the operational risk management group include formalization of incurred events, self-assessment of controls and the monitoring of key indicators. These processes are embedded in the local governance of J.P. Morgan, under the Control Committee and the Audit Committee, which ensure effective communication of the control events and their corrective actions senior management of the firm. J.P. Morgan's control processes meet the requirements of the Central Bank of Brazil.

The Chief Operating Officer (COO) is responsible for all support areas of the firm, including the operational risk management of the entities which make up J.P. Morgan, encompassing all lines of business. The Operational Risk Manager (ORM) coordinates the operational risk management practices for the various business areas and support areas of J.P. Morgan. Additionally, the operational risk manager is responsible for identifying training demands in relation to operational risk policies.


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