The 2002 Loss Data Collection Exercise for Operational Risk: Summary of the Data Collected

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BCBS  | 
05 November 2001
Status:  Superseded
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 |  41 pages

This paper summarises the data collected through the 2002 Operational Risk Loss Data Collection Exercise (LDCE) launched by the Risk Management Group (RMG) of the Basel Committee on Banking Supervision in June 2002. The 2002 LDCE asked participating banks to provide information on individual operational losses during 2001, internal capital allocation for operational risk, expected operational losses, and a number of exposure indicators tied to specific business lines. The 2002 LDCE was an extension and refinement of two previous data collection exercises sponsored by the RMG, which focused on banks' internal capital allocations for operational risk and their overall operational risk loss experience during the period from 1998 to 2000.

The goals of this paper are to describe the results of the 2002 LDCE and to compare the data with the information collected by the RMG in its previous data collection efforts. As in the summary of the previous exercise, this paper focuses on the individual loss event data submitted by participating banks. To this end, the paper provides an analysis of the range of individual gross loss amounts and of the distribution of these losses across a set of standardised business lines and event types. It also provides an analysis of the information banks reported on insurance and other recoveries associated with these individual loss events. In both instances, the paper compares the information collected for 2001 with similar information for 2000.

Finally, the paper provides a brief examination of data collected on the share of economic capital that the participating banks allocated to operational risk, as well as their use of information on expected operational losses for pricing, reserving and expensing. The paper ends with a brief analysis of the comprehensiveness of 'exposure indicator' data provided by banks.