Lack of uptake hinders AMA development in UK
The advanced measurement approach was meant to give larger institutions the freedom to develop their own sophisticated op risk models under Basel II. But the approach has failed to take off in the UK, with some now questioning whether its days are numbered. OpRisk asks what went wrong
At OpRisk Europe this year, the Basel advanced measurement approach (AMA) for operational risk capital was described as an endangered species in the UK. Panellists debated whether the approach had a future and also what had led to its underwhelming uptake.
To understand why the AMA hasn’t encountered the enthusiasm in the UK that the UK Financial Services Authority (FSA) had hoped, it is helpful to go back to the beginning. When it was introduced 10 years ago under the Basel II accord, the AMA
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