Financial Risk Manager Part 1
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An emerging market bank that has previously calculated operational risk capital using the basic indicator approach will begin using the Basel II standardized approach instead, having just met the necessary criteria for doing so. Which of the following correctly describes a way in which the bank's operational risk capital calculations will change?
A
The calculations will be based on a percentile of a loss distribution rather than a percentage applied to gross income.
B
The calculations will need to be broken down by the operational risk types defined by the Basel Committee.
C
The calculations will need to be broken down by business line.
D
The calculations will now need to include a Business Indicator component.