# Bafin's Hufeld: op risk modelling 'almost impossible'

## AMA can go, but other models will stay, Felix Hufeld tells Risk.net

In this issue, Germany's top supervisor says the modelling of operational risk capital has proved "almost impossible" at the standards of accuracy required by Basel II's advanced measurement approach (AMA) – but he also reassures the industry that capital models have a part to play for other risk types.

Regulators met in New York on December 1-2 to discuss the issue and are expected to propose that the AMA be killed off and replaced with a new, standardised approach.

In an interview that took place just prior to that meeting, Felix Hufeld, president of German supervisor Bafin, says: "Just looking at operational risk, frankly we probably wouldn't mind being more restrictive and possibly abandoning the AMA approach. But I wouldn't say the same thing for credit risk. Over the whole range of risk categories we very much support using internal models, just in a constrained fashion."

In October, Risk.net revealed the Basel Committee on Banking Supervision was leaning towards scrapping the AMA. The committee consulted on simpler methods of calculating operational risk in October 2014. Aspects of its revised standardised approach are expected to form part of a new standardised measurement approach, which all banks would have to follow.