Guidance

SS14/13 – Operational risk

Chapter

The PRA’s expectations in relation to AMA

Printed on: 01/11/2024

Rulebook at: 19/12/2013

2

The PRA’s expectations in relation to AMA

2.1

A firm may use an AMA in combination with either the BIA or TSA provided it obtains permission from the PRA.

  • 19/12/2013

2.2

In granting such permission, the PRA is required  by CRRArticle 314(3) to impose the following conditions when the AMA is used in combination with BIA or TSA:

  1. (a) on the date of first implementation of an AMA, a ‘significant’ part of the institution’s operational risk are captured by that Approach; and
  2. (b) the institution to commit to apply the AMA across a ‘material’ part of its operations within a time schedule approved by the PRA.
  • 19/12/2013

2.3

For the purposes of these conditions, the PRA considers that:

  • a ‘significant’ part of operational risk is approximately 50% or more; and
  • a ‘material’ part of its operations is around 85% (or more).
  • 19/12/2013