Research on loss data backs up new Basel op risk charge

Study finds op risk losses can be scaled in the same way as tests on engineering models

Test flight: scaling up data from aircraft models is comparable with loss data

The proposed replacement of internal models for operational risk capital with a standardised measurement approach (SMA) has been widely criticised, but forthcoming research from the Journal of Operational Risk is set to justify the SMA's relatively simple approach – by showing that, despite different scales and frequencies, all types of op risk loss have the same underlying behaviour.

Under the