Europe considers wider op-risk insurance role in new capital rules

BRUSSELS - The European Commission confirmed today it proposes the possible recognition of operational risk insurance as a way of reducing capital charges in all three methods of measuring op risk in its new protective capital rules for banks and investment firms.

The proposal opens up a gap between the commission’s third capital adequacy directive (Cad 3) and the Basel II bank safety standards proposed by global banking regulators for the large international banks of the world’s leading economies. The Basel II proposals would confine the use of insurance solely to banks using advanced approaches.

The commission, the ruling body of the EU, said it was contemplating a wider recognition of insurance because of the wide range of firms affected Cad 3

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