OpRisk Europe: Regulators urge caution over simplifying op risk models

Banks should not abandon complex risk models just because they failed during the financial crisis, conference hears

Regulators need to be cautious about simplifying operational risk models, delegates at the OpRisk Europe conference heard yesterday.

"There is a lot of nervousness in the regulatory community about risk models," said Rudi Bonte, special representative for banking supervision at the National Bank of Belgium.

"Looking back at the financial crisis, it was a disaster, and all these models underestimated the risks and the capital requirements of the banks, so some of us think let's get rid of all