SMA
WHAT IS THIS? The standardised measurement approach (SMA) is a method of assessing operational risk proposed by the Basel Committee on Banking Supervision in 2016 as a replacement for all existing approaches, including internal models. Critics have attacked the SMA as too blunt and backward-looking, delaying its approval.
Can the AMA be reborn?
Regulators could rescue op risk modelling through Pillar 2, writes former supervisor
Tweaks to standard op risk method not enough, experts warn
Basel Committee to integrate insurance and divestitures, but SMA still lacks forward-looking approach
Custom models work better for op risks, research finds
Bayesian approach touted for mis-selling and other management failures
Two-regime approach saves up to 30% op risk capital
Modelling shift to 'crisis mode' mitigates pro-cyclical calculations
Firms aim to convince Basel on merits of op risk insurance
Lack of recognition in new SMA capital charge could cause market to shrink, worry insurers
Risk managers wary of op risk securitisation
Sfr270 million transaction by Credit Suisse and Zurich thought unlikely to be copied due to SMA
Even for me, AMA models are too complicated
The AMA doesn’t make any sense – but the idea of a single, simple equation does, writes Ruben Cohen
Banks told to seize moment to devise new op risk charge
Banks should “get clever and develop their own model” in response to SMA, says UK bank risk manager
Fed paper stirs debate on new operational risk charge
Researchers offer academic justification for Basel's standardised measurement approach
Weighing criticism of the SMA reveals a lack of balance
Operational risk managers are becoming unusually excitable, with some justification
Basel’s Adachi: banks may discard some loss data under SMA
Losses from discontinued businesses may not count towards op risk capital
Research on loss data backs up new Basel op risk charge
Study finds op risk losses can be scaled in the same way as tests on engineering models
Euro banks to bear brunt of €115bn SMA capital hike: study
"You will get some winners and some losers, but with this it's mostly losers," says ORX's Carrivick
SMA proposal fires up op risk managers
Banks say backward-looking SMA is easily gamed and will lead to high and volatile capital charges
In operational risk, the future ain’t what it used to be
Just because we can't measure op risk accurately doesn't mean we should give up, argues Peter Sime
Discarding the AMA could become a source of op risk
Basel Committee's "tantrum-like reaction" is not supported by evidence, say practitioners
Basel op risk plans 'not fit for purpose', say banks
SMA expected to raise capital charges, but lower standards in risk management