A naive uncertainty model for measuring operational risks faced by financial institutions

When insufficient data are available for measuring operational risk faced by a financial institute, most of the models depending on the probability theory are failure. Differing from that we use a probability distribution to depict random uncertainty, in this paper we use a number to represent the naive uncertainty in a phase serving for operational risk identification. The simplest form of the naive uncertainty model for measuring operational risk with multiple phases is the weighted mean with the uncertainties. It is also valid when we have a rough judgment for the uncertainties with intervals or fuzzy values. In this paper, we give a calculation case in lending operational risk to demonstrate the model validity.