Le Pan takes on group allocation

Nicholas Le Pan, head of the Basel Committee’s Accord Implemetation Group, must sort out the challenging home-host issue. The success of Basel II depends on it. By Ellen Leander

Call it by any name – home-host, group allocation or some other moniker – but the fact remains that it is the issue that could unravel six years of hard graft by the Basel Committee on Banking Supervision. The advanced measurement approach (AMA) – which requires firms to calculate a capital charge for operational risk based on their own internal models – also requires that the op risk capital charge somehow be allocated to the many and varied subsidiaries that a large