Firms aim to convince Basel on merits of op risk insurance

Lack of recognition in new SMA capital charge could cause market to shrink, worry insurers

bis-tower-basel
The Basel Committee's AMA allows banks to consider insurance when calculating op risk capital charge

When people are concerned their house might burn down, they might naturally decide to buy insurance. So if their home were subsequently ravaged by fire, they would receive a pre-agreed sum as compensation.

Among some banks, much the same sentiment applies to operational risk. Fearing hundreds of millions of dollars of losses stemming from inadequate or failed internal systems, people, processes and external events, they have decided to enter into insurance contracts designed to pay out if and

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