The Basel Committee on Banking Supervision has released a consultative document outlining proposed revisions to the standardized approach for calculating operational risk capital. The revisions aim to address weaknesses identified in the existing framework and enhance its risk sensitivity.

Key Proposals

• Revised Standardized Approach: The proposed approach introduces a more granular and risk-sensitive methodology for calculating operational risk capital.
• Loss Data Integration: The framework places greater emphasis on incorporating historical loss data to better reflect a bank’s operational risk profile.
• Internal Control Environment: The proposals consider a bank’s internal control environment as a key factor in determining its operational risk exposure.

Objectives

The Basel Committee aims to achieve the following objectives with these revisions:

• Improve the accuracy and consistency of operational risk capital calculations.
• Reduce reliance on internal models, promoting comparability across banks.
• Enhance the overall resilience of the banking system to operational risk events.

The consultative document is open for public comment, and the Basel Committee encourages stakeholders to provide feedback on the proposed revisions. The deadline for comments is [Insert Deadline Date Here].