A bank situated in an emerging market has been using the basic indicator method to compute its operational risk capital. Having now met the necessary prerequisites, the bank is shifting to the Basel II standardized method. How will the calculations for the bank's operational risk capital change under the new method?

Exam-Like

The calculations will be based on a percentile of a loss distribution rather than a percentage applied to gross income.

13.0%

The calculations will need to be broken down by the operational risk types defined by the Basel Committee.

20.1%

The calculations will need to be broken down by business line.

52.1%

The calculations will now need to include a Business Indicator component.

14.8%

Financial Risk Manager Part 1