BIA: Difference between revisions
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*[[Risk Weighted Assets]] | *[[Risk Weighted Assets]] | ||
*[[TSA]] | *[[TSA]] | ||
[[Category:Identify_and_assess_risks]] | |||
[[Category:Manage_risks]] | |||
Revision as of 14:25, 8 October 2020
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'.
