Fed paper stirs debate on new operational risk charge

Researchers offer academic justification for Basel's standardised measurement approach

Academic books
Federal Reserve paper seeks to provide intellectual backing for SMA

A recent paper by two US Federal Reserve economists has sought to provide intellectual backing for the Basel Committee on Banking Supervision's proposed new operational risk capital charge, but industry practitioners dispute its findings.

The research tests certain features of the Basel Committee's standardised measurement approach (SMA), which was put forward in March as a replacement to all existing approaches to op risk. It is thought likely to proceed and is due to be finalised by the end

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