Regulatory Alerts2015-02-09
Application Process to Adopt the Advanced Measurement Approach for Measuring Banks' Operational Risk Exposure
The Basel Committee on Banking Supervision (BCBS), as implemented by South African regulators, requires banks utilizing the Advanced Measurement Approach to establish rigorous verification and validation frameworks for their operational risk management models. Banks must systematically assess governance, data accuracy, risk appetite alignment, and control effectiveness through independent reviews, structured self-assessments, and comprehensive board reporting. The guidelines standardize gross loss definitions, recovery treatments, and model validation practices to ensure capital charge estimates accurately reflect operational risk profiles while preserving supervisory discretion.
Share