BCBS 181

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Definition

BCBS 181 is a document published by the Basel Committee on Banking Supervision on October 2010 in the Supervision category.

Title

Recognising the risk-mitigating impact of insurance in operational risk modelling.

Abstract

The Basel Committee on Banking Supervision today issuedRecognising the risk-mitigating impact of insurance in operational risk modelling. The paper discusses potential benefits and shortcomings of banks' use of insurance to mitigate operational risk.

The regulatory capital framework permits banks, subject to certain criteria and limitations, to use insurance to mitigate the operational risk capital charge under the advanced measurement approach (AMA). The implementation of this provision has raised some challenges and technical questions. In response, the report clarifies supervisory expectations on the range of industry AMA practices while promoting increased convergence in operational risk management.

Document Profile

See Also

Disclaimers

For definitive information on regulatory matters always consult primary sources, especially where it concerns legally binding rules and regulations.

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