TSA

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Bank supervision - capital adequacy - operational risk.

Standardised Approach.

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