BIA: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Expand.) |
imported>Doug Williamson (Amend link.) |
||
| Line 28: | Line 28: | ||
*[[Internal Models Approach]] | *[[Internal Models Approach]] | ||
*[[Operational risk]] | *[[Operational risk]] | ||
*[[Risk | *[[Risk Weighted Assets]] | ||
*[[TSA]] | *[[TSA]] | ||
Revision as of 14:00, 10 November 2016
Bank supervision - capital adequacy - operational risk.
Basic Indicator Approach.
The Basic Indicator Approach is a method of evaluation of certain operational risks for banks, for capital adequacy calculation purposes.
Under the BIA, gross income (GI) is multiplied by a coefficient (alpha) to calculate the measure of risk weighted assets.
For example:
GI x alpha = RWAs
£10m x 15% = £1.5m
The alpha is standardised across all business lines.
This weighting factor is also sometimes known as 'beta'.
