Title[ Part 3: The Second Pillar - Supervisory Review Process
Section[ C. Operational risk
778. Gross income, used in the Basic Indicator and Standardised Approaches for operational risk, is only a proxy for the scale of operational risk exposure of a bank and can in some cases (e.g. for banks with low margins or profitability) underestimate the need for capital for operational risk. With reference to the Committee document on Sound Practices for the Management and Supervision of Operational Risk (February 2003), the supervisor should consider whether the capital requirement generated by the Pillar 1 calculation gives a consistent picture of the individual bank’s operational risk exposure, for example in comparison with other banks of similar size and with similar operations.
Contents
Prev
Next
Last
