HKMA to rule out AMA approach

Hong Kong's banking regulator, the Hong Kong Monetary Authority (HKMA), will not allow the territory's banks to use the advanced measurement approaches (AMA) for measuring operational risk when Basel II is implemented from the end of 2006.

Banks operating in Special Administrative Region will instead be limited to using the standardised and basic indicator approaches to operational risk in the initial stages, and will be encouraged to focus on the management of op risk rather than the calculation of an operational risk capital charge, says Simon Topping, executive director, banking policy, at the HKMA.

“It’s the only thing in Basel II we’re not going to allow initially because we don’t believe that building up elaborate systems

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