European banks face steep op risk capital hike from SMA

Op risk accounts for 28% of US banks’ RWAs, compared with 12% at European banks

Mountain climbers
European banks could see their op risk RWAs climb sharply

European banks are expected to see steeper increases in risk-weighted assets (RWAs) for operational risk than their US counterparts under the Basel Committee on Banking Supervision's proposed standardised measurement approach (SMA) for calculating risk capital.

"Our initial estimates are that the impact on the US banks would not be very significant, and that's how we want it to be," says a regulatory source close to the Basel Committee.

The Basel Committee wants to replace the advanced

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