Regulators want active dialogue on op risk

BASEL - Active dialogue between banks and their supervisors is the key to the continued development of approaches to managing operational risk, global banking regulators said in a much-delayed paper on op risk sound practices issued in December.

The Basel Committee on Banking Supervision, the body that in effect regulates international banking, said there is still much work to be done on developing ways of managing op risk.

For example, progress towards a standard op risk definition is hampered by differences in interpretation across banks, the Basel regulators said. The ability of banks to quantify operational risk also varies greatly.

The purpose of the two-part, 23-page paper, prepared by the Basel Committee's risk management group