Is there hope in the advanced measurement approaches?

The carrot of lower operational risk capital charges under the proposed Basel II bank capital accord is promised only to those banks using an advanced measurement approach for calculating these charges.

Major banks may be allowed to reduce their overall op risk charge to a floor of 9% of the current minimum regulatory capital for credit and market risks. That compares with the floor of 12% of regulatory capital for banks using the simpler basic and standardised approaches to calculating the o

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