The Standardized Approach in Calculating Capital to Cover Operational Risk

question 132

True/False

The Standardized Approach in calculating capital to cover operational risk requires DIs to separate activities into business units from which a capital charge is determined based on the amount of operational risk in each unit.

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Definitions:

Conditional Promises

Commitments that are contingent upon the occurrence of a specified event or situation.

Mutual Consideration

The exchange of value or promises that each party agrees to in a contractual agreement.

The Code

A term often used to refer to a specific body of systematic and comprehensive laws or regulations governing a particular area, such as the Uniform Commercial Code.

Illusory

Something that is deceptive or lacks real substance or existence.