New Study Reveals Rural Banks in Indonesia Need Less Operational Risk Capital.
The article discusses how rural banks in Indonesia calculate the capital needed to cover operational risks. The researchers used historical data from 77 banks over three years and three different methods to estimate the capital charge. They found that on average, banks need around 1.5% of their assets to cover operational risks. The more advanced the method used, the less capital is required, with the Alternative Standardized Approach needing the least amount of capital.