Standardised Approach

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Bank supervision - capital adequacy - operational risk.

(SA or TSA).

The Standardised Approach is a method of evaluation of certain operational risks for banks, for capital adequacy calculation purposes.

Under the standardised approach, gross income (GI) is multiplied by a coefficient (beta) to calculate the measure of risk weighted assets.

For example:

GI x beta = RWAs

£10m x 12% = £1.2m

The beta varies, according to the business line.

See also