5.1 This chapter provides feedback to responses to Chapter 8 of consultation paper (CP) 16/22 - Implementation of the Basel 3.1 standards, which set out proposals to implement the Basel 3.1 standards for operational risk. This chapter also sets out the PRA's near-final policy on operational risk following the consultation.
5.2 In CP16/22, the PRA proposed to implement a new standardised approach (SA) for Pillar 1 operational risk capital requirements and exercise the national discretion included in the Basel 3.1 standards to set the internal loss multiplier (ILM) equal to 1. The new SA would replace all existing approaches for Pillar 1 operational risk requirements.
5.3 The PRA received 25 responses to its proposals on operational risk. The respondents were broadly supportive of the key elements of the proposals. Comments focused mainly on the details of the calculation of the SA.
5.4 Having considered the consultation responses, the PRA has decided to amend the draft rules in certain
…