Op risk capital: why US should adopt SMA today

No reason to delay roll-out of standardised approach, says TCH’s Greg Baer

Call for SMA: regulators in US should hasten switch to standardised approach

Attempts to measure operational risk capital have not gone well. The advanced measurement approach (AMA) by all accounts has proved a failure. The Basel Committee’s attempt to introduce a model-driven process for calculating operational risk capital was criticised by the industry and then formally rejected by regulators. In its place, Basel has developed a new, simplified methodology: the standardised measurement approach, or SMA. Part of the final package of revisions to Basel III, the SMA has