Basel Committee to publish new paper on group allocation issue

Basel, Switzerland -- The Basel Committee on Banking Supervision will issue a paper outlining its approach to the group allocation issue shortly after the scheduled mid-January meetings of that group and (separately) the Capital Task Force. The Basel Committee will solicit public comment on the paper, much as it did for October’s expected loss/unexpected loss credit risk paper, according to regulatory sources.

As Operational Risk was going to press, the Risk Management Group (RMG) and the Accord Implementation Group (AIG) were jointly work-ing on a paper that would outline the group allocation issue for the meetings’ participants. However, this paper is said to be for internal discussion and is not intended for publication.

The group allocation issue, also known as the home-host issue, does not have an easy solution, regulators say. The problem arises under the advanced measure- ment approach (AMA) --