Asian banks fear unfair op risk capital charges

Operational risk has long been a challenge for Asia’s banks. But many smaller banks in the region fear that a capital charge against such hazards as fraud, computer systems failure and settlement foul-ups would penalise them unfairly if it took the form suggested by global banking regulators.

They are worried that an operational risk capital charge as proposed under Basel II, the new capital adequacy accord intended in the first instance for large international banks, will result in smaller banks having to set aside more capital than is justified by the level of risk they face.

The Basel Committee of banking supervisors from the Group of 10 (G-10) leading economies, the body that in effect regulates international banking, proposes introducing an op-risk capital charge for the

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