Brazilian risk experts are divided over the feasibility of the start date for applying for advanced measurement approaches (AMA) in operational risk put out by the Central Bank of Brazil. Some argue that the timeframe is too tight, falls too close to other risk commitments and that those that apply early could gain significant commercial benefits. Others say there were no surprises contained in the measures and note banks can apply when ready.
All comments on the Central Bank’s public audience 39, a consultative paper, must be submitted by March 28. By the end of the first half of next year, banks will be able to start the process of authorization of internal operational risk models on which capital requirements are based. Brazilian banks are already working on credit and market risk models and starting to consider liquidity risk, leaving little time for the complex work needed for operational risk modelling, says Marcus Manduca, financial risk partner, at PricewaterhouseCoopers in São Paulo.
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