On April 6, 2016, the Federal Reserve Board’s Division of Banking Supervision and Regulation and Basel Coordination Committee issued a bulletin that provides supervisory guidance with respect to the issuance of the Basel Committee on Banking Supervision’s second consultative paper published on March 4, 2016, “Standardised Measurement Approach for Operational Risk.”

The BCBS paper proposes certain revisions applicable to large, internationally active banking organizations, including a non-model-based method for calculating operational risk-weighted assets and a withdrawal of the advanced measurement approaches (AMA) for operational risk from the Basel capital framework. In its bulletin, the Federal Reserve Board states that it will consider the BCBS proposals in connection with the US advanced approaches riskbased capital rule in a manner consistent with the US notice and comment process, during which time the existing AMA capital requirements will remain in effect.

The Federal Reserve Board guidance is available at: http://www.federalreserve.gov/bankinforeg/basel/files/bcc1601.pdf