The European Banking Authority (EBA) has published final draft regulatory technical standards (RTS) that specify the criteria that Member State regulators need to take into account before granting institutions permission to use advanced measurement approaches (AMA) for calculating their capital requirements for operational risk.

The RTS will replace all the following Committee of European Banking Supervisors (CEBS) guidelines that address AMA institutions: the ‘Guidelines on the Implementation, Validation and Assessment of AMA and Internal Ratings Based Approaches’, limited to section 4.3 and annexes iv and v, the ‘Compendium of Supplementary Guidelines on implementation issues of operational risk’, limited to the individual guidance papers, ‘Guidelines on the use test for AMA institutions’ and ‘Guidelines on the allocation of AMA capital’ and the ‘Guidelines on Operational Risk Mitigation Techniques’.

The RTS will enter into force on the twentieth day following that of its publication in the Official Journal of the EU. For institutions using an AMA for the purpose of calculating their own funds requirements for operational risk, or for institutions which have already applied for permission to use AMA for that purpose, the RTS shall apply from one year after its entry into force.

View EBA publishes final draft standards on assessment methodologies to use AMA for operational risk, 5 June 2015