The members oft he EACB welcome the opportunity to comment on the Committee proposal on Standardised Measurement Approach (SMA) fort he estimation of operational risk capital.
The proposed reform of the operational risk framework provides a realistic solution for smaller and less complex institutions. However, we question that this should lead at the same time to scrapthe AMA approach. While it is understandable that the Committee sees an inherent complexity of the AMA and a wide range of internal modelling practice, we believe that the decision to withdraw all internal modelling practices does not seem an appropriate and proportionate answer and could have serious unintended consequences for risk and capital management.The committee should carefully re-evaluate the decision.
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