Since the Basel Committee proposed an explicit capital charge in its consultation paper issued in June 1999, various approaches to measuring operational risk have been developed by both the industry and supervisors. Among them was the Internal Risk Based (IRB) approach, in which individual...

This paper summarizes the recent discussions on the regulatory framework for operational risk capital charge, incorporating various comments that the Bank of Japan (BOJ) has received since the authors published a discussion paper titled "Internal Risk Based Approach" on the website of BOJ in...