Regulatory Alerts2006-06-13
Guidance Notice for Reporting Standardised Approach Use and Approving Alternative Indicators for Operational Risk
Issued by BaFin and the Deutsche Bundesbank, this guidance requires financial institutions to formally report their intention to implement the Standardised Approach for operational risk capital charges starting in 2007 and outlines the approval process for using an Alternative Standardised Indicator. Institutions must submit written notifications in German detailing internal assessments, implementation timelines, and contact information to both regulators. The notice further specifies that approval for the alternative indicator requires demonstrating dominant retail or commercial banking activities and confirms that the new indicator provides a more accurate operational risk assessment.
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