HK details framework

HONG KONG – After the shock announcement two months ago that it would not be allowing banks to adopt the advanced measurement approach (AMA), the Hong Kong Monetary Authority (HKMA) outlined its Basel II operational risk framework in a more formal document in mid-August.

The HKMA's decision not to adopt the AMA surprised many, who assumed that a financial services industry as advanced and sophisticated as Hong Kong's would naturally push banks to aspire to the AMA. As a result, Hong Kong firms must implement either the basic indicator, standardised, or alternative standardised approaches. In contrast, Hong Kong's rival Singapore has been actively pushing its domestic banks to pursue AMA adoption, and as a result all the major banks are currently working on AMA

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