Amid increased size and complexity of the banking industry, operational risk has a greaterpotential to transpire in greater and more harmful ways than many other sources of risk.This paper provides a succinct overview of modeling constraints and critical issues ofconsistent risk estimation under current regulatory standards. In particular, we show how thevarying characteristics of operational risk and different methods to identify, collect andreport operational risk losses influence the reliability and consistency of operational riskestimates. The implications of our findings offer instructive and tractable recommendationsfor a more effective operational risk measurement.