News & Events

Financial Institutions Partner Spencer Sloan was quoted in an American Banker article titled, “Banks Get Operational Risk Relief in Basel Proposal,” which discussed some of the proposed changes that were introduced on March 19 as part of the federal banking agencies’ regulatory capital requirement rulemaking package. In discussing how the proposed changes to the operational risk framework moved away from the current internal model based calculation approach, Spencer noted, “There are potential downsides to taking some of those determinations out of the banks’ own hands, but I believe, at the very least, banks will have a set playbook to operate under [and] regulators themselves [will] be better able to make these apples-to-apples comparisons across banks.” He also said, “There is certainly an argument that for any given bank, they may be able to more finely tune their own internal models, but I think it's weighing the trade offs of simplicity from a standardized approach…which in turn may have more macro-financial stability benefits compared to each bank continuing with its own customized model.”

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