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ORM Approaches
The Standardized Approach (TSA)
—Bank’s activities are divided into eight business lines
—Banks must map their business lines into the regulatory business lines
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—Capital calculated for each business line (each business line has a predefined factor)
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—Requires compliance with qualifying criteria
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—Typically capital would be lower than BIA but higher than AMA
qAverage Gross Income 3 Years to Beta Factors
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qPillar II Supervisory Review
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qModerate/High Level of Risk Mitigation
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qInterim Phase – Longer Duration
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qLower Charge if Retail Activity
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qLoss Data Collection In Place with Resolution Plans
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qBusiness Line Mapping – Cost Allocation Strategies
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