The Regulatory Framework

Giuliana Birindelli and Paola Ferretti

Chapter Chapter 3 in Operational Risk Management in Banks, 2017, pp 37-66 from Palgrave Macmillan

Abstract: Abstract The current regulatory frameworkFramework underlines operational risk as a significant risk faced by banks and requires coverageCoverage by own funds. It includes provisions for three alternative approaches for calculating operational risk capital requirementsCapital requirement , reflecting the broad diversity among European institutions. These approaches are namely, the (BIA)Basic Indicator Approach (BIA) , the (SIA) and the (AMA)Advanced Measurement Approach (AMA) , which incorporate different levels of risk sensitivity requiring different degrees of sophistication. In this chapter we analyse the main features of all these approaches, highlighting their critical issues. Finally, we shortly describe the last proposals of the Basel Committee, which, among others, propose a new standardized measurement approach for operational riskOperational risk (OR) , as part of the broader objective of balancing simplicity, comparability and risk sensitivity.

Date: 2017
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-59452-5_3

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137594525

DOI: 10.1057/978-1-137-59452-5_3

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().