The potential impact of explicit Basel II operational risk capital charges on the competitive environment of processing banks in the United States

Scott Chu, Patrick de Fontnouvelle, Victoria Garrity and Eric Rosengren ()
Authors registered in the RePEc Author Service: Andreas Lehnert ()

No 4, Basel II White Paper from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Basel II replaces Basel I?s implicit capital charge on operational risk with an explicit charge. Certain U.S. banks concentrated in processing-related business lines ? which have significant operational risk ? could thus face an increase in overall minimum regulatory capital requirements. Some have argued that, as a result, these so-called ?processing banks? would be disadvantaged vis--vis competitors not subject to regulatory capital requirements for operational risk. This paper evaluates these concerns.

Keywords: Bank capital; Risk management; Basel capital accord (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-reg and nep-ure
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