Section 4
Minimum own funds requirements
for operational risk
Article 102
1. Competent authorities
shall require credit institutions to hold own funds against
operational risk in accordance with the approaches set out in
Articles 103, 104 and 105.
2. Without prejudice to
paragraph 4, credit institutions that use the approach set out in
Article 104 shall not revert to the use of the approach set out in
Article 103, except for demonstrated good cause and subject to
approval by the competent authorities.
3. Without prejudice to
paragraph 4, credit institutions that use the approach set out in
Article 105 shall not revert to the use of the approaches set out in
Articles 103 or 104 except for demonstrated good cause and
subject to approval by the competent authorities.
4. Competent authorities
may allow credit institutions to use a combination of approaches
in accordance with Annex X, Part 4.
Article 103
The capital requirement for
operational risk under the Basic Indicator Approach shall be
a certain percentage of a relevant indicator, in accordance
with the parameters set out in Annex X, Part 1.
Article 104
1. Under the Standardised
Approach, credit institutions shall divide their activities
into a number of business lines as set out in Annex X, Part 2.
2. For each business line,
credit institutions shall calculate a capital requirement for
operational risk as a certain percentage of a relevant indicator, in
accordance with the parameters set out in Annex X, Part 2.
3. For certain business
lines, the competent authorities may under certain conditions
authorise a credit institution to use an alternative relevant
indicator for determining its capital requirement for operational risk as set
out in Annex X, Part 2, points 5 to 11.
4. The capital requirement
for operational risk under the Standardised Approach shall
be the sum of the capital requirements for
operational risk across all individual business lines.
5. The parameters for the
Standardised Approach are set out in Annex X, Part 2.
6. To qualify for use of
the Standardised Approach, credit institutions shall meet the
criteria set out in Annex X, Part 2.
Article 105
1. Credit institutions may
use Advanced Measurement Approaches based on their
own operational risk measurement systems, provided that the
competent authority expressly approves the use of the
models concerned for calculating the own funds requirement.
2. Credit institutions
shall satisfy their competent authorities that they meet the
qualifying criteria set out in Annex X, Part 3.
3. When an Advanced
Measurement Approach is intended to be used by an EU parent
credit institution and its subsidiaries or by the subsidiaries of an
EU parent financial holding company, the competent authorities
of the different legal entities shall cooperate closely as
provided for in Articles 129 to 132. The application shall include
the elements listed in Annex X, Part 3.
4. Where an EU parent
credit institution and its subsidiaries or the subsidiaries of an EU
parent financial holding company use an Advanced Measurement
Approach on a unified basis, the competent authorities may
allow the qualifying criteria set out in Annex X, Part 3 to be met
by the parent and its subsidiaries considered together.
