Regulatory Alerts2013-01-18
G2/2013: Operational Risk Practices
The South African Reserve Bank issued Guidance Note G2/2013 to require banks to align their operational risk management frameworks with Basel Committee on Banking Supervision principles. The document clarifies regulatory definitions for partial and hybrid Advanced Measurement Approaches, stipulates that reverting to simpler risk measurement methods requires prior written approval, and mandates close home-host supervisory cooperation for cross-border capital allocation. Banks must assess their current policies against these international standards, as the regulator will conduct continuous supervisory reviews that may result in additional capital requirements for unsatisfactory outcomes.
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