Boundary event
FRM Part 2 glossary · Operational Risk
Definition
A loss whose operational cause produces consequences in another risk category, requiring consistent classification and no double counting.
Boundary event in plain English
A documentation failure that produces a credit loss may be managed as operational risk while its regulatory capital consequence sits in credit risk. The boundary policy should preserve the root cause without charging the same loss twice.
Learn these first
Related FRM Part 2 terms
FRM Part 2 practice questions · FRM Part 2 flashcards · FRM Part 2 study guide