medium · Frm Part 2 Operational Risk
An operational risk event occurs where an operations error leads to a euro5 million loss on a credit facility.
According to the Basel boundary rules, how is this event treated for regulatory capital?
- It is recorded as operational risk in the internal database but capitalized as credit risk.
- It is split 50/50 between credit and operational risk capital.
- It is capitalized as operational risk under the SMA.
- It is ignored for capital purposes as it was an 'accident'.
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