Regulatory Alerts2024-06-19
Capital Adequacy and Measurement—Operational Risk
The Supervisor of Banks issued this directive to establish the standardized approach for calculating operational risk capital requirements for banking corporations. It defines the Business Indicator components and mandates the use of internal loss data to determine the Internal Loss Multiplier, which scales capital requirements based on historical loss experience. The document sets strict minimum standards for loss data collection, classification, and quality, particularly for larger banks in buckets 2 and 3, while allowing transitional provisions for institutions with limited data history.
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