Four federal agencies published a joint guidance on Friday to help banks comply with their “advanced approaches rule” from 2007, which requires certain firms to use a framework of advanced measurement approaches to calculate operational risk.
Under the rule, banks have the flexibility to develop operational risk measurement and management programs, processes, and tools that are tailored to their specific activities, business environments, and internal controls. Regulators expect that there will be “a narrower range of effective risk management and measurement practices” as banks build such programs, according to the Office of the Comptroller of the Currency’s announcement.
