Apra exec defends modifications

SINGAPORE – An executive from the Australian Prudential Regulatory Authority (Apra) defended the supervisor's decision to dramatically modify its approach to the Basel II standardised approach in a discussion paper released at the end of July.

In the paper, the regulator dismisses both the basic indicator approach and the standardised approach as producing "wide variations in outcomes" among financial institutions "that cannot be tied readily to differences in operational risk". Instead, firms that do not adopt the advanced measurement approach will be forced to use the alternative standardised approach, in which the op risk capital charge is calculated as a percentage of the firm's assets.

The executive, Judy Lau, senior manager

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