Capital Charges For Operational And Other Risks -- The Regulatory Logic

The existing Basel Accord includes some capital provision for risks other than market and credit risk, such as operational risk, legal risk and so on.

But the extent of the provision for these "other risks", and how this relates to the provision for credit risk, in particular, has never been outlined by the regulators.

Over the last year, consultative papers have been published by the Basel Committee (June) and the European Commission (November) on revisions to the capital adequacy framework for

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