Observed range of practice in key elements of Advanced Measurement Approaches (AMA)

This version

BCBS  | 
Sound practices
28 July 2009

This paper on the range of practice in banks' use of the advanced measurement approach (AMA) for operational risk describes the practices observed by BCBS members some of the key internal governance, data and modelling challenges that faced the industry. It updates a previous report issued in 2006, evaluating changes observed since then, promoting further maturation of industry operational risk practices and further engaging the industry in maintaining high standards for acceptable practice. 

Since the publication of the 2006 report, the Basel Committee has seen a considerable evolution in the risk measurement and risk management practices associated with the operational risk discipline in general and in the AMA more specifically. These evolutionary changes have had a marked effect on how AMA banks address key internal governance, data and modelling challenges.