Operational-Risk Capital Approaches and BIA Calculation

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Operational-Risk Capital Approaches and BIA Calculation - Article

This article explains operational-risk capital approaches with special focus on the Basic Indicator Approach used in CAIIB numerical questions. It covers BIA gross income, the 15% alpha factor, treatment of negative-income years, conversion of operational-risk capital into RWA, and the older TSA and AMA approaches. It also explains RBI’s forthcoming Basel III Standardised Approach and its current implementation status.

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