URY CB Operational Risk Rules
On Aug. 13, URY CB consulted on Basel III implementation draft law.
- Consultation launched on draft law implementing Basel III re operational risk rules.
- Follows Basel Dec. 2017 issued final text from Basel III reform package, see #36701.
- Draft aims to amend art 172 of consolidated rules on regulation and control of financial system (CRRCFS) on the calculation of the capital requirement for operational risk.
- Aligns law with international standard i.e. Basel III on post-crisis reforms of Dec 2017.
- Key Aspects
- It will replace basic indicator by business indicator, establishes capital requirement for operational risk for year t+ 1 of 12% of business indicator calculated at end of year t.
- Level of exposure to operational risk of institution also based on financial statements, determined by adding interest component, services component, financial component.
- Proposal includes formulas for calculation of mentioned components and details on some terms that should be calculated as average of three years: t, t-1 and t-2.
- New annual information requirement as regards the capital for operational risk on individual and consolidated basis, form/template is also provided alongside draft law.
- Basel standard includes in determination of requirement an internal loss multiplier.
- As measure of operational risk materialization, for banks with business indicator less than/equal to €1000 mn, supervisors can choose to assign value of 1 to said multiplier.
- Chosen option by Superintendence of Financial Services of URY CB, therefore, internal data on operational risk losses will not affect calculation of capital for said risk.
- Comments can be submitted until Sep. 5, 2019.
||CP, PR, 8/13/2019; CRRCFS
||Compliance; Financial; Legal; Operations; Reporting; Risk; Treasury
||Banking; Corporate; Equity
Last substantive update on 08/14/2019