UK House of Lords joins the op risk modelling debate

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LONDON - A report from the UK House of Lords Economic Affairs Committee has cautioned supervisors about relying on statistical models alone when measuring operational risk exposure. It warns "supervisors should base their assessments of operational risk upon a close understanding of the banks they regulate, and not upon statistical models, which cannot substitute for judgement based on analysis". Although not controversial - the UK Financial Services Authority uses its judgement and analysis of