Open AccessCalculating capital requirements for operational risk
Author(s) -
Gerd Waschbusch,
Sabina Kiszka
Publication year - 2021
Publication title -
ekonomia menedżerska/managerial economics
Language(s) - English
Resource type - Journals
eISSN - 2353-3609
pISSN - 1898-1143
DOI - 10.7494/manage.2021.22.1.35
Subject(s) - operational risk , strengths and weaknesses , risk analysis (engineering) , capital requirement , business , capital (architecture) , dependency (uml) , basel ii , risk adjusted return on capital , risk weighted asset , economic capital , risk management , finance , actuarial science , financial capital , engineering , economics , human capital , systems engineering , capital formation , economic growth , philosophy , archaeology , epistemology , microeconomics , history , incentive
Operational risks have become increasingly important for banks, especially against the background of growing IT dependency and the increasing complexity of their activities. Further-more, the corona pandemic contributed to the increased risk potential. Therefore, banks have to back these risks with own funds. There are currently three measurement approaches for determining the capital requirements for operational risk. In recent years, and especially during the Great Financial Crisis of 2007/2008, however, some of the weaknesses inherent in these approaches have become apparent. Thus, the Basel Committee on Banking Supervision revised the current capital framework. Therefore, this article examines the various measurement approaches, addresses inherent weaknesses and moreover, presents the future measurement approach developed by the supervisory authorities.