ABI to run op risk database next year

The Italian Banks Association (ABI) will have a fully functional operational loss database supported by information from Italy's largest banks by the second half of next year.

The association, which has already drafted operational loss event criteria following the establishment of a working group to look into the matter in July last year, will act as custodian of the database, called Dipo (Database Italiano delle Perdite Operative).

Banks will submit a subset of their operational loss event information that will be centralised into a pool by the ABI. The data can then be modelled to estimate potential operational losses in Italian banking. Dipo will help Italian banks to rank their operational performance against a national average, as well as allowing them to comply with advanced capital allocation for operational losses as defined under the revised Basel II capital accord proposals.

The scheme has been set up in consultation with international operational loss database hosts like the UK's British Bankers Association and the Geneva Associtation. This should ensure that there is no unnecessary duplication for banks that operate in multiple jurisdictions.

ABI will send a letter to Italian banks at the end of the year seeking formal membership to the current ad hoc scheme. The database will then undergo two test periods before going live in the second half of next year.

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