Discarding the AMA could become a source of op risk

Basel Committee's "tantrum-like reaction" is not supported by evidence, say practitioners

Back in time: Basel Committee's SMA proposals are a 'backward step'

On March 3, the Basel Committee on Banking Supervision published a long-awaited consultative document on its new standardised measurement approach (SMA) to operational risk.

In light of well-documented problems with the advanced measurement approach (AMA), the Basel Committee proposes some radical and ill-conceived reforms. It would replace the AMA – the own-models approach to operational risk used by more sophisticated banks – with a simplistic metric for regulatory capital. Broadly, that metr