Standardized measurement approach: is comparability attainable?

Recently, the Basel Committee on Banking Supervision (BCBS) published a consultation paper that proposed a radical change to the methodologies permitted for estimating operational risk regulatory capital (ORRC). The Committee proposed replacing all existing approaches with a single new formula, the standardized measurement approach (SMA), which, it is claimed, will be simpler and promote comparability of estimated ORRC across banks. This...