Basel shortcomings: Danger lurks on the rocky road to Basel II
The Basel Accord proposals to define operational risk contain many fatal flaws, says Jacques Pézier. He argues that it would be better to focus management time on managing key risks than on developing op risk databases and measurement procedures.
With its September CP2½ working paper on operational risk1 – so-called because it has appeared between CP2 and the Basel Committee’s third Basel II consultative paper (CP3) that is expected in February – the committee has watered down and made more flexible its original proposals for an operational risk capital charge under the Basel
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