Sigh. What are the leaders in Congress thinking? Certainly the results of quantitative impact study four were a bit, well, unfortunate. The sharp drop in credit risk capital levels caused a sharp intake of breath in certain corner offices around Capitol Hill. But much of that can be explained by the relatively early stage that the banks were at in their modelling, etc. when they completed QIS4. Too, the US Congress seems to be ignoring the existence of Pillar II, which effectively allows regulators to top up regulatory capital at will anyway if the models spew out numbers that are too low.
Why are these legislators so very against Basel II in the US? Why do they not appreciate the consideration that has gone into its construction, the inherent logic of its design, the intelligence of the three pillars, the excitement of the new operational risk charge? Why have certain banks in the US spent so much time and money lobbying against Basel II? And why have these Congressmen allowed themselves to be so manipulated by them? These, I am afraid, are not questions I can answer here.
Moving rapidly on, I'd like to personally congratulate those firms and individuals who have been short-listed for our third annual Operational Risk & Compliance achievement awards. The list of those who have qualified appears on page 25, and each of these firms deserves a round of applause. We had a real avalanche of applications this year—twice the number of firms that you see short-listed. So another round of thanks to all those who applied who didn't make the short-list, and a word of encouragement to apply next year.
I'd also like to congratulate the 15 lucky individuals who have won copies of Operational Risk: Practical Approaches to Implementation as a result of filling in our monthly survey, OR&C Intelligence. This month's survey, on AMA implementation, can be accessed via our homepage, www.opriskandcompliance.com. Have a go...
Lastly, I hope to see as many of you as possible at our two events, OpRisk Europe and OpRiskUSA, in London and New York respectively. I look forward to these two conferences every year to learn about the latest developments and controversies in the industry, as well as to network with the op risk community.
Have a great month!
Ellen Davis, Editor