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Introduction (partial) "1. Establishing consistency in the implementation of post-crisis regulatory reforms is an important focus of the Basel Committee. Consistent application of global bank standards will improve the resilience of the global banking system, promote public confidence in regulatory capital ratios and encourage a level playing field for internationally active banks. In October 2014, the Committee published for consultation a revised Standardised Approach for operational risk that sought to address weaknesses in the existing standardised approaches. In conjunction with that proposal, the Committee embarked on a review of the costs and benefits of the framework’s Advanced Measurement Approaches (AMA) for operational risk. 2. A key outcome from the Committee’s analysis is that the combination of a simple standardised measure of operational risk and bank-specific loss data provides a sufficiently risk sensitive measure of operational risk. The Committee believes that this combination also meets its objectives of promoting comparability of risk-based capital measures and reducing model complexity. 3. Building on this finding, the Committee has developed the Standardised Measurement Approach (SMA), which provides a single non-model-based method for the estimation of operational risk capital. The SMA, which builds on the simplicity and comparability offered by a standardised approach, also incorporates the risk sensitivity of an advanced approach by combining in a standardised fashion the use of a bank’s financial statement information and its internal loss experience."

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