Apac banks fear cyber risk capital shortfall under SMA
Method’s reliance on past losses and lack of scenario analysis could weaken cyber risk defences
The bluntness of the Basel Committee on Banking Supervision’s revised approach to calculating operational risk capital could leave banks undercapitalised against a rise in future losses from cyber attacks, risk managers at Asia-Pacific banks fear. Some even argue the new method could disincentivise banks to quantify such exposures.
One of the major determinants of a bank’s op risk capital under the standardised measurement approach (SMA) is its losses from past op risk breaches. Yet with
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