Ridiculous, flawed, too diverse: op risk models under fire

Regulators want more consistency - and some are questioning AMA

op-risk-losses

If two banks were given the same operational loss data, and asked to calculate a capital requirement on the back of it, the results would be different – a natural consequence of the make-do-and-mend modelling framework that is the advanced measurement approach (AMA). But how different would they be – and how far can divergence go before the rules become meaningless? Critics claim it has gone too far already, and the bigger question now is what to do about it.  “The dive