Basel regulators cut op risk charge benchmark to 12%

BASEL - Global banking regulators formally acknowledged in late September some of the criticisms of their controversial proposal for an op risk capital charge. Their plan is to make large international banks set aside protective capital from 2005 specifically to guard against operational risk.

The Basel Committee on Banking Supervision, the body that in effect regulates international banking, said the benchmark figure on which such a charge would be based would be 12%, down from the 20% originally suggested. The committee offered a slightly adjusted definition of operational risk and opened the field to a range of advanced approaches for calculating an op risk capital charge.

The Basel regulators - drawn mainly from the ranks of banking supervisors in the Group of 10 leading

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