IIF Authors

Status: Will be live at 06/06/2016 00:00

IIF/GFMA Response to the BCBS SMA for Operational Risk

Monday, June 6, 2016

The IIF together with GFMA responded to the Basel Committee's consultation on the new Standardized Measurement Approach (SMA) for Operational Risk.

The industry supports the overall goal of improving the capital treatment of operational risk, but the SMA as proposed will have a very significant effect on the system-wide quantity of operational risk capital and it will impact banks in many different ways that might not be related to the potential operational risks inherent in their business and operating model.

In the Consultation Response, the IIF and GFMA make a number of concrete proposals on how to improve the SMA in ways that can be easily implemented in the final standard.