Commission highlights weak points of op risk insurance
BRUSSELS – The European Commission highlighted in November major drawbacks to the use of operational risk insurance to reduce op risk capital charges, despite its readiness to explore a wider use of insurance than that proposed in the Basel II bank accord.
The commission said the so-called limit-based approach to using insurance seemed difficult to implement in practice, while premium-based approaches could result in firms with the weakest operational controls enjoying lower capital charges than
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