Back to the floor

Australia’s major banks are all targeting the advanced measurement approach for calculating operational risk capital under the new Basel Accord. As such, the concept of a floor is proving irksome, writes Nick Sawyer.

The latest musings from the Switzerland-based Basel Committee on Banking Supervision have Australia’s risk management executives scratching their heads. At first glance, the decision to scrap contentious proposals for a 75% operational risk capital floor appears to be a positive step for Australia’s four major banks, all of which are eyeing the more sophisticated advanced measurement approach (AMA). But new measures to introduce a combined floor for credit and operational risk have some

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