Operational risk - consultative papers issued by the Basel Committee

The Basel Committee on Banking Supervision today issued for consultation two papers on operational risk:Sound Practices for the Management and Supervision of Operational RiskandOperational Risk - Supervisory Guidelines for the Advanced Measurement Approaches.

Sound Practices for the Management and Supervision of Operational Risk

updates the Committee's 2003 paper on this topic. The updated version highlights the evolution of operational risk management since 2003 and is based on best industry practice and supervisory experience. The principles outlined in the report are discussed within the context of three overarching themes: governance, risk management and disclosure.

The Committee also issued for consultation

Operational Risk - Supervisory Guidelines for the Advanced Measurement Approaches

. The regulatory capital adequacy framework envisages that, over time, the operational risk discipline will continue to mature and converge towards a narrower band of effective risk management and measurement practices. The guidance seeks to better achieve this by setting out supervisory guidelines relating to governance, data and modelling.

Comments on the reports should be submitted by25 February 2011by e-mail (baselcommittee@bis.org) or post (Secretariat of the Basel Committee on Banking Supervision, Bank for International Settlements, CH-4002 Basel, Switzerland).

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