BIA: Difference between revisions

Revision as of 08:26, 8 April 2021

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.

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 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'.
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 *[[ASA]]
 *[[Bank supervision]]
+*[[Basic indicator approach]]
 *[[Capital adequacy]]
 *[[Internal Models Approach]]