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Operational risk

Advanced measurement approaches

The September working paper on operational risk from the Basel Committee on Banking Supervision confirmed that global banking regulators are looking at a range of advanced ways of calculating op risk capital charges instead of a single method.

Pro-cyclicality in the new Basel Accord

Could Basel II worsen recessions? By backtesting the proposed capital rules to the last recession, D. Wilson Ervin and Tom Wilde argue that the increased risk sensitivity of loan portfolio regulatory capital in the new Accord could have unwelcome…

Operational risk: the last frontier

This month sees the publication of a position paper on operational risk by the Basel Committee on Banking Supervision. Mark Lawrence, ANZ Bank’s chief risk officer and an expert on Basel’s controversial proposals for a charge on op risk, tells us what to…

Basel acts on private equity losses

The Basel Committee on Banking Supervision has issued a proposal for determining the capital reserves for bank equity exposures. It promises to be as controversial as the other aspects of the Basel II capital Accord.

Basel issues best practice in audit function

The Basel Committee on Banking Supervision has issued a best practice paper on the need for co-ordination between banks, their internal and external auditors, and supervisors that highlights the responsibility board directors have with regard to risk…

Probing granularity

The granularity adjustment, which adjusts risk weightings for credit portfolio diversification, is one of Basel II’s key modelling assumptions. Here, Tom Wilde uncovers a weakness in this assumption arising from the differences in the underlying credit…

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