CEBS seeks views on op risk mitigation
New CEBS guidelines intend to clarify the rules concerning the use of insurance and other risk-transfer mechanisms in the advanced measurement approach (AMA)
The consultation is open to all interested parties, including supervised institutions and other market participants.
With this paper, the CEBS aims to move forward with respect to the GL10 paper of April 2006, which provided only limited guidance on insurance contracts and other risk-transfer mechanisms (ORTM) for operational risk.
The paper's main objective is to provide appropriate guidelines on the recognition of insurance within the AMA's capital calculation. In particular, the topics addressed cover the issues of eligibility of protection providers, characteristics of eligible products and haircuts for uncertainty of coverage.
A first set of guidelines states that, to use ORTM products within the AMA, experience must be proven, and they cannot be held or used for trading purposes. In addition, the document anticipates the more conservative requirement of the Capital Requirements Directive, which is being considered under the comitology procedure, namely that both insurance contracts and ORTM together should not exceed the 20% limit for capital alleviation.
CEBS presents its guidelines on operational risk mitigation techniques for a public consultation that starts on April 15 and runs until July 7. Comments received will be published on CEBS's website unless respondents explicitly request otherwise. Please send your comments to the following email address: cp25@c-ebs.org.
A public hearing will take place in the beginning of July at CEBS's premises to allow all interested parties to present their comments.
Click here for the guidelines
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Contract negotiation tops tech sovereignty for banks in Asia
Regulatory pressure is rising, but industry still focused on service agreements with third parties
The SaaSpocalypse shows private markets need risk models
Investors have little idea how bad the losses in private credit are going to be
Crisis? Which crisis? How ECB stress test failed to see Strait
Banks were told to design geopolitical shock scenarios, but some focused mainly on tariffs
G-Sib capital surcharge: how indexing and averaging alter incentives
Capital risk strategist anticipates Basel III endgame impact on US big-bank behaviour
The race to model private market risks
BlackRock maps holdings to risk factors; competitors aim to get the best from statistical methods
Doubts linger over start date for 24-hour US stock trading
NSCC will be ready in June, but questions remain over corporate actions and circuit breakers
Waiting for the light: what’s stalling European equity markets?
Esma says EU market has a structural problem, but the focus on lit vs dark trading overlooks post-trade issues
ECC risk chief says Iran crisis will not delay VAR transition
Incorporating 2022 Ukraine shock ensured new margin model is robust in face of energy volatility