SMA: the story so far
Read Risk.net's coverage on the controversial move to the standardised measurement approach
The advanced measurement approach (AMA) to operational risk capital attracted criticism virtually from birth and it never became the universal gold standard for operational risk that its architects intended. But the industry was still startled when Risk.net broke the news in October 2015 that AMA and its two sister methods were set to be abandoned in favour of the single standardised measurement approach. The upheaval caused by this news is still going on. To read our coverage of this crucial development, click on the links in the timeline.
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JP, Citi may not see capital benefit from new op risk rules
Collins floor may also prevent Morgan Stanley, State Street and Wells Fargo from realising SMA savings
Read moreChinese megabanks set to lose out in switch to SMA
Bank of China, ICBC likely to see lower reductions in operational risk capital due to reliance on interest income
Read moreBasel op risk modelling blow shifts focus to Pillar 2
Demise of AMA leaves industry needing risk-sensitive approach for calculating top-up capital, says consultant
Read moreApac banks dodge op risk capital hit from new rules
Chinese lenders have largest capital requirements in region; banks expect muted increase on average
Read moreBasel III: final op risk framework leaves banks guessing
Analysis suggests big capital savings on average, but uncertainty persists over uneven implementation
Read moreBanks await Basel decision on legacy op risk losses
European banks could see big jump in capital if losses from legacy businesses are included in SMA
Read moreU-turn on SMA comparability sparks anger
Three regulators echo bank dismay as key principle of op risk capital framework is abandoned
Read moreOp risk managers not sold on SMA alternative
Proposed forward-looking approach would permit internal modelling, but penalise banks if losses exceed estimates
Read moreRevised SMA could allow banks to ignore past op risk losses
Leaked proposals say loss component will be left to national regulators, threatening an unlevel playing field
Read moreDon’t let the SMA kill op risk modelling
The SMA is not a good response to the AMA’s failings – but don’t throw the baby out with the bathwater
Read moreMemo to bank CEOs: treat op risk with more respect
High-profile critics of op risk capital rules are misguided, say Ariane Chapelle and Evan Sekeris
Read moreScrap ‘absurd’ op risk RWA framework, says Sands
Ex-StanChart chief exec advocates replacing current op risk capital framework with regulator-set buffer
Read moreNew Basel delay throws SMA into doubt
Revised op risk capital framework unlikely to be implemented uniformly, even when a deal is agreed, bankers say
Read moreSMA data shortfalls ‘make op risk review a must’
New research adds to criticism of proposed op risk capital method
Read moreDeutsche Bank faces op risk capital hit from DoJ fine
Bump to operational risk capital under SMA could be bigger than expected, experts warn
Read moreTweaks to standard op risk method not enough, experts warn
Basel Committee to integrate insurance and divestitures, but SMA still lacks forward-looking approach
Read moreFirms aim to convince Basel on merits of op risk insurance
Lack of recognition in new SMA capital charge could cause market to shrink, worry insurers
Read moreRisk managers wary of op risk securitisation
Sfr270 million transaction by Credit Suisse and Zurich thought unlikely to be copied due to SMA
Read moreBank size and tail losses skewing SMA calculation
Op risk researchers criticise logic of planned new capital method
Read moreEuro banks to bear brunt of €115bn SMA capital hike: study
"You will get some winners and some losers, but with this it's mostly losers," says ORX's Carrivick
Read moreSMA proposal fires up op risk managers
Banks say backward-looking SMA is easily gamed and will lead to high and volatile capital charges
Read moreEuropean banks face steep op risk capital hike from SMA
Op risk accounts for 28% of US banks’ RWAs, compared with 12% at European banks
Read moreDiscarding the AMA could become a source of op risk
Basel Committee's "tantrum-like reaction" is not supported by evidence, say practitioners
Read moreBasel op risk plans 'not fit for purpose', say banks
SMA expected to raise capital charges, but lower standards in risk management
Read moreAdios AMA: Basel proposal to bin op risk models worries banks
Firms doubtful about risk sensitivity of standardised replacement charge
Read more