Q.81 Austra-Asian Bank uses the advanced measurement approach to calculate the operational risk capital for regulatory purposes. Samuel Baker, a financial controller, working at the bank, analyzes the research reports on internal data and external data. He concludes the following from his analysis:

I. The loss frequency distribution must be specific to the bank and based on internal data and scenario analysis estimates
II. Historically, banks have done a much better job at documenting their operational losses than their credit risk losses

Which of these statements are incorrect?