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m Standard headings &/or gen fixes. using AWB |
Stated the fixed percentage of assets that must be held using this approach |
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Based on the original Basel Accord, banks using the basic indicator approach must hold capital for operational risk equal to the average over the previous three years of a fixed percentage of positive annual gross income. Figures for any year in which annual gross income is negative or zero should be excluded from both the numerator and denominator when calculating the average.
The fixed percentage ‘alpha’ is typically 15 percent of annual gross income.
==See also==
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