Explain Operational Risk Capital Calculation Approach

Reference no: EM132389057 , Length: word count:1500

Assignment -

Project Background: In December 2017, the Basel Committee on Banking Supervision (BCBS) finalized the Basel 4 standards and released its final rules on operational risk capital. The BCBS introduced a new single non-model based method for calculating the operational risk capital charge. The model is called the Standardised Measurement Approach (SA). This replaces three existing approaches under Pillar 1 and is due to be applied from 1 January 2022 on-wards.

Several documents are written on the new SA model. In this project we refer to the consultative document.

Working on this project now will put you at the forefront of thinking about current developments in ORM in the banking industry. This is very important for those of you who wish to work in risk management and in ORM.

KPMG a world-leading firm in the financial services industry has recently published a report describing the way ahead for Basel 4 Operational Risk.

There are various tasks that you need to complete for this project:

1- Explain in detail the modeling component of Basel 4 Operational Risk Capital Calculation Approach. Focus on the technical detail. (1000 words)

2- Comment on the advantages and disadvantages of each of the model components. (500 words)

3- TBA.

(Feel free to do your own research and find relevant information that supports your explanations. You must provide a propoer reference list if you use academic or professional resources).

Attachment:- Assignment File.rar

Reference no: EM132389057

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