AMA Calculations | Wolters Kluwer Financial Services OneSumX
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AMA Calculations

  • Provide a quantitative solution for the measurement of operational risk capital

    Basel II allows institutions to calculate operational risk using one of three approaches: basic indicator, standardized, or advanced measurement (AMA). The basic indicator and standardized approaches yield high capital estimates and make it difficult to perform scenario analysis and stress testing. Most smaller financial institutions, including banks in emerging markets, do not apply AMA, however, because they lack the resources to develop the advanced models required.

    Wolters Kluwer Financial Services helps these institutions by providing a packaged implementation of the COM approach that would incorporate the internal data, external data, and scenario analysis required by AMA. Analysts need a computational environment for performing parameter estimation, goodness-of-fit tests, and other statistical analyses. After implementing the COM approach, they now have a way to package the solution that would protect their intellectual property while making it easy for financial analysts to measure their own operational risk capital.

    The Results

    • Development time cut by more than five months
    • Technical support wait times eliminated
    • Intellectual property protected