Why An Op Risk Capital Charge Is Dangerous And Won’t Work


The operational risk capital charge proposed under the Basle II banking accord is fundamentally flawed, and could have unintended and highly undesirable consequences, argues Karen Shaw Petrou

As a physics undergraduate, one was taught that any equation that required more than three blackboards was probably wrong, with the simple elegance of Newton’s and Einstein’s equations set in sharp contrast to our lengthy efforts in the lecture hall.

Reading the Basle II bank capital adequacy proposals b

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