ASA: Difference between revisions
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Under the alternative standardised approach, the nominal amount of loans and advances is multiplied by a fixed percentage to calculate the measure of risk weighted assets. | Under the alternative standardised approach, the nominal amount of loans and advances is multiplied by a fixed percentage to calculate the measure of risk weighted assets (RWAs). | ||
For example: | For example: | ||
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£1,000m x 3.5% = £35m | £1,000m x 3.5% = £35m | ||
RWAs for other business lines are determined in the same way as under the standardised approach (TSA). | |||
Revision as of 12:14, 29 October 2016
Bank supervision - capital adequacy - operational risk.
Alternative Standardised Approach.
The Alternative Standardised Approach is a method of evaluation of certain operational risks, for capital adequacy calculation purposes.
The ASA may be used by certain banks whose business is predominantly retail and commercial banking, in relation to their loans and advances.
Under the alternative standardised approach, the nominal amount of loans and advances is multiplied by a fixed percentage to calculate the measure of risk weighted assets (RWAs).
For example:
Nominal amount x 3.5% = RWAs
£1,000m x 3.5% = £35m
RWAs for other business lines are determined in the same way as under the standardised approach (TSA).
