Banks fear ill-aligned op risk capital under new simple method

Critics worry the proposed revised standardised approach to operational risk capital creates more problems than it solves – including for banks using the advanced measurement method

A simple switch? Revised standardised approach has drawn criticism

Operational risk management has changed significantly since the publication, a decade ago, of the first international guidelines on how much capital banks should put aside for this most elusive of risk categories.

The latest chapter of the discipline's on-going evolution has culminated in proposals to replace the existing so-called simpler approaches to capital, ie, those not based on banks' own internal models. The new single method is the revised standardised approach (RSA), put forward by the