TAILIEUCHUNG - Operational Risk: Supporting Document to the New Basel Capital Accord

The abolition of the Clearing and Settlement System had a social impact as well, leaving a number of people unemployed. Most of them were highly specialized personnel, well-experienced in domestic payment operations but at the same time relatively inflexible to systemic changes that were to come. This created an additional pressure on the government to find a solution that would make the transfer to the new payment system less distressing. The obvious solution was to sell or rent government-owned Clearing and Settlement Bureau premises to the existing banks under the condition that these workers remain employed. This created additional income to the budget and partly resolved the. | Superseded document Basel Committee on Banking Supervision Consultative Document Operational Risk Supporting Document to the New Basel Capital Accord Issued for comment by 31 May2001 January 2001 BANK FOR INTERNATIONAL SETTLEMENTS Superseded document Table of Contents SECTION A I. BACKGROUND AND CAPITAL Framework II. DEFINITION OF OPERATIONAL Direct vs. Indirect expected vs. Unexpected Losses EL UL .3 III. GENERAL Interaction with Pillars 2 and T HE continuum Ongoing industry SECTION B IV. BASIC INDICATOR V. STANDARDISED Description of VI. INTERNAL MEASUREMENT Structure of Internal Measurement Business lines and loss Risk weight and gamma scaling factor .10 Further Key Loss Distribution approach LDA .11 VII. QUALIFYING Basic indicator T HE Standardised Effective risk management and Measurement and INTERNAL Measurement Effective risk management and Measurement and SECTION C REVIEW OF OTHER VIII. THE FLOOR IX. OUTSOURCING. 15 X. RISK TRANSFER AND Superseded document XI. OPERATIONAL RISK MANAGEMENT ANNEX 1 RECENT INDUSTRY DEVELOPMENTS .18 ANNEX 2 EXAMPLE MAPPING OF BUSINESS ANNEX 3 STANDARDISED ANNEX 4 BUSINESS LINES LOSS TYPES AND SUGGESTED EXPOSURE ANNEX 5 RISK PROFILE ANNEX 6 LOSS DISTRIBUTION .

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