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Evaluating the AMA and the new standardized approach for operational risk capital

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  • Marco Migueis

Abstract

Seven desirable properties for a capital framework are proposed, and the advanced measurement approach (AMA) and the new standardized approach (NSA) for operational risk capital are evaluated relative to them. The AMA is vulnerable to gaming, complex, and lacks comparability. The NSA lacks risk sensitivity and is unlikely to be appropriately conservative for US banks.

Suggested Citation

  • Marco Migueis, 2019. "Evaluating the AMA and the new standardized approach for operational risk capital," Journal of Banking Regulation, Palgrave Macmillan, vol. 20(4), pages 302-311, December.
    • Handle: RePEc:pal:jbkreg:v:20:y:2019:i:4:d:10.1057_s41261-019-00095-z
    DOI: 10.1057/s41261-019-00095-z
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    More about this item

    Keywords

    Banking regulation; Basel standards; Regulatory capital; Operational risk; Internal models; Standardized approaches;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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