Basic indicator approach: Difference between revisions
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imported>Doug Williamson (Create page. Source: BIA page.) |
imported>Doug Williamson (Mend link.) |
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*[[Operational risk]] | *[[Operational risk]] | ||
*[[Risk Weighted Assets]] | *[[Risk Weighted Assets]] | ||
*[[ | *[[Standardised Approach]] (SA or TSA) | ||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Latest revision as of 19:55, 25 June 2022
Bank supervision - capital adequacy - operational risk.
(BIA).
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'.
