DIPO is an interbanking activity launched in 2003 and designed to support the development of operational risk management and create a methodology to gather and exchange information on operational losses suffered by members.
The activities primarily consist of managing and maintaining the Italian database of operational losses (DIPO), a database that has been gathering information since January 2003 on each single event generating an operational risk loss suffered by member banks.
Since december 2011 DIPO has became part of ABIServizi S.p.A..
DIPO is governed by a a Managing Board, several Technical Committees, and a Technical Secretary.

An appropriate software (Dipoweb) is used to upload data, not only on each single loss event exceeding 5.000 euros, but also other useful information to contextualize the situation in which the losses were generated (for example exposure indicators such as earning margin for each business line, operating costs, legal category of the entity reporting the data).

In order to harmonize the collection and classification of loss events, each member can rely on certain instruments devised by DIPO including:
♦ the DIPO manual describing the harmonized procedures according to which members should collect information on loss events exceeding 5.000 euros and each field of the data structure;
♦ the definition of gross operating losses;
♦ the decision tree for assignment of event type;
♦ criteria regarding mapping of losses and earning margins on 8 business lines defined at the regulatory level.

Moreover, queries put forth by members on census/classification of particularly complex events are periodically updated with answers provided by a working group.
In line with the definition of operational risk that also includes legal risk, the technical committee prepared a document outlining “Criteria for census of events connected to legal risk”. Moreover, the committee also handled the issue of events concerning a sort of borderland between operational risk and credit risk.
Feedback encompasses a wide range of detailed information that ranges from suggestions on recovery, to macro territorial areas, to second level event type. All the information conveyed to members is on an anonymous basis.

Stating from reports on the first semester of 2006, feedback to members was accompanied by certain new information:
♦ the legal category of each entity reporting the record (classification in 6 classes, consistent with those adopted by the Bank of Italy);
♦ all the peer groups affiliated with the entities reporting the record, composed of other entities presenting similar values of operating costs and earning margins both complete and open for business line.

An additional flow has started to be provided since 2008: it was aimed at describing, from a quality standpoint, the principal characteristics of the major events reported to DIPO (losses above the 1 million euros threshold), without prejudice to the confidential and untraceable nature of the information with respect to the bank or banking group that recorded the losses (DIPO AI).

ABIServizi S.p.A.
DIPO - ITALIAN DATABASE OF OPERATIONAL LOSSES
Piazza del Gesù 49 - 00186 Roma - P.IVA 00988761003
www.dipo-operationalrisk.it - dipo@abi.it