Operational risk capital rules revised, market risk FAQs issued
The Basel Committee on Banking Supervision has finalized a technical amendment to operational risk capital requirements and issued new frequently asked questions on market risk. The revised standard for operational risk is set for implementation by 1 April 2029.
Clarifying operational risk components
The Basel Committee on Banking Supervision (BCBS) regularly reviews implementation issues of its standards, providing clarifications or technical amendments.
In June 2025, the Committee proposed a technical amendment for consultation on the standardised approach to operational risk.
This amendment clarified the treatment of 'rental income from investment properties' under the business indicator (BI), a key input for operational risk capital requirements.
Following feedback, the Committee incorporated additional amendments to Table 1 in OPE10, extending the clarification to 'interest expenses'.
These revisions ensure consistent treatment of rental income and expenses from operating leases within the BI.
Accurate categorisation is crucial for calculating the correct BI value, which directly impacts the business indicator component (BIC) and the internal loss multiplier (ILM), and thus the overall capital requirement for operational risk.
The final revised standard will be implemented by 1 April 2029.
Market risk curvature: new floor
The Committee finalised a response to a frequently asked question (FAQ) on market risk, along with consequential amendments to related FAQs.
These FAQs clarify standard interpretation without changing the underlying rules.
The new FAQ, MAR21.99, addresses curvature capital requirements for CSR risk classes.
It permits banks to floor the respective CSR curvature risk factors at zero when applying the downward shock, provided specific conditions are met, such as capping the risk weight.
Consequential amendments were made to existing FAQs (MAR21.8, MAR21.9, MAR21.10, MAR21.11) to align with this new guidance on flooring risk weights for credit instruments.