Advanced Measurement Approaches Group (AMAG)

The Advanced Measurement Approaches Group (AMAG) is open to any banking and/or financial institution regulated in the United States, which is either mandated, opting in, or considering opting in to the Advanced Approaches under Basel III and previous installments, or is required to conduct annual CCAR/DFAST exercises. A senior officer responsible for operational risk management represents each member institution in AMAG.

AMAG was formed in mid-2005 at the suggestion of the U.S. Inter-Agency Working Group on Operational Risk. The purpose of the group is to share industry views on aspects of AMA implementation and the operational risk aspects of CCAR and DFAST, with the U.S. financial services regulatory agencies toward a goal of successful implementation. In fulfilling its mission, the Group engages in extensive and ongoing practice-sharing discussions and exercises.

AMAG supports the Advanced Measurement Approaches (AMA), the operational risk aspects of Comprehensive Capital Analysis and Review (CCAR), and Dodd Frank Act Stress Tests (DFAST), including their fundamental goals of improving operational risk management practices and ensuring capital adequacy. To achieve these goals AMAG believes, first and foremost, that approaches should promote flexible principles-based and risk-based methods for estimating capital and managing operational risk. Second, AMAG advocates a proper balance between management and quantification.

Since its formation, AMAG has operated in a relatively fluid regulatory environment. Over the past ten years the group has engaged in a regular dialogue with key regulatory representatives, working sessions, and the development of white papers in the furtherance of its mission.

AMAG impact to date:

  • Senior staff members at U.S. regulatory agencies have been receptive to the key messages from AMAG; our cornerstone executive summary,  AMA Implementation (PDF), argues for principles-based supervision and supervisory balance between measurement and management.
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  • The Interagency Operational Risk Working Group (more recently, the AMA-BQT) has welcomed AMAG on a regular basis with a focus on transitioning tangible issues from policy to supervision which, from AMAG members' perspective, is most important at this stage.
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  • AMAG has received positive feedback from senior agency officials on the group's Capital Estimation and Scenario Analysis Range-of-Practice papers, and more recent Industry Position papers (IPPs) and discussions on various "Thorny" Loss Distribution Approach topics, Scenario Analysis and Validation, and other topics. Their comments have indicated that the papers have been very helpful in support of the industry-regulatory implementation dialogue and enhanced understanding.

 AMAG Activity Highlights

  • Ongoing watch briefs and group networking.
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  • Regular meetings and discussions with U.S. agency representatives.
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  • AMA Validation Practices, an industry white paper (2014).
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  • Periodic topical round tables; recent examples include those dedicated to developments in BEICF (2015), Risk Drivers (2014), Risk Appetite and Challenge (2014), Validation (2013 & 2014), and CCAR (2013).
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  • AMAG 2014, 2013, 2012, 2011, 2010, and 2008 Range of Practice (ROP) surveys of the member institutions, covering over 20 categories of both Measurement and Quantification implementation.
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  • AMAG Quant Challenges: Thorny Topics IPP (July 2013).
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  • Industry Position Paper on Scenario Analysis: Practices (December 2012).
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  • Industry Position Paper on Scenario Analysis: Perspectives and Principles (May 2012).
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  • Refresh of Industry Position Paper (IPP) on Unit of Measure & Dependence (August 2011).
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  • Active subgroups in the areas of Data, Capital Models, Scenario Analysis, and Validation (November 2010 to date).
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  • Responses to SIGOR Consultation Documents on sound practices and supervisory guidance (February 2011) and on the use of insurance for risk mitigation (February 2010).
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  • Previous surveys, discussions, and development of AMAG industry position papers on BEICF, Unit of Measure and Dependence, and ICAAP (May 2008–April 2009).
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  • Review and index to the Final U.S. Rule (November 2007).
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  • Ongoing discussions about examination and supervision (June 2007 to date).
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  • AMAG extensive Range-of-Practices survey and paper on Scenario Analysis (May-December 2007).
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  • AMAG Response to the U.S. Proposed Supervisory Guidance (May 2007).
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  • AMAG white paper and Executive Summary on Capital Estimation Range of Practices (August–December 2006), based on an extensive survey of member practices.
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  • Review and analysis of the notice of proposed rulemaking (NPR): collated members' assessment of priority issues for discussion; developed and released AMAG response (March, 2006–March 2007).
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  • Review and commentary on AIGOR's Range of Observed Practices (June 2006).
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  • Development and release of white paper, AMA Implementation; meetings with key agency officials (2005).

The group has engaged in numerous meetings/discussions with key agency representatives, including, but not limited to, meetings with the following (more recent sessions listed first and then in alphabetical order):

  • Comptroller Curry (2014); Comptroller Dugan (2005).
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  • The U.S. Interagency AMA-BQT (formerly the IORWG) and/or SIGOR (formerly the AIGOR) (2014, 2013, 2012, 2011, 2008, 2007, and 2006).
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  • Carolyn DuChene, Deputy Comptroller of the OCC (2014, 2013, 2012, and 2011) Kevin Bailey, Deputy Comptroller of the OCC and Chair of SIGOR (2011, 2010, 2009, and 2007).
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  • Steven Fay, BQT Leader and Senior Professional, Supervision, Regulation and Credit, FRB Boston (2014).
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  • Kenneth Fulton, Operational Risk and Basel Advisor, OCC, and formerly of the FRB (2014, 2013, 2012, 2011, and 2009).
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  • David Jones, Chair, Basel Coordinating Committee and Senior Advisor, Banking Supervision and Regulation, Board of Governors (2014 and 2012).
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  • Marco Migueis, Economist, Policy, Banking Supervision & Regulation, FRB (2014 and 2012).
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  • Hema Parekh, AMA Basel Qualification Team Co-Lead and Senior Professional, Federal Reserve Bank of Richmond (2014).
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  • Carlos Sosa, Supervisory Financial Analyst, Policy, Banking Supervision & Regulation, FRB (2014, 2013, and 2012).
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  • Robert Stewart, AMA Basel Qualification Team Co-Lead and Risk Consultant and Risk Specialist, Federal Reserve Bank of Chicago (2014 and 2012).
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  • John Walsh, Senior Bank Examiner, FRBNY (2013 and 2012).
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  • Alfred Seivold, Senior Examination Specialist, FDIC (2013, 2012, 2011, and 2009).
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  • Eric Caban, AVP, FRB–New York (2012 and 2011).
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  • Adrienne Haden, Assistant Director, Operational Risk, FRB (2012, 2011, and 2009).
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  • Evan Sekeris, FRB–Richmond (2012 and 2009).
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  • Bakhodir Ergashev, Operational Risk Quantitative Examiner (2012).
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  • Eric Rosengren, Patrick deFontnouvelle, and the Federal Reserve Board Boston Quantitative Analysis Team (2011, 2010, 2009, 2008, and 2005).
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  • Roger Cole, Director of Banking Supervision and Regulation at the FRB (2008, 2007, and 2005).
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  • Jeanmarie Davis SVP, Manager of Large Complex Banking Organizations Department, FRBNY (2008).
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  • Former Fed Governor Susan Bies, former Vice Chairman Roger Ferguson, and senior staff at the Federal Reserve Board (2005).
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  • Other staff members from the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and/or the Office of Thrift Supervision (2005-2014).

Industry Position Papers

During 2008–2014, AMAG has been engaged in the development of a series of Industry Position Papers (IPPs) as a means of fostering a productive dialogue between the industry and the regulatory agencies in the U.S. about the practical implementation of the specifics of AMA. Most recent instances begin with surveys of members to capture key issues. Then a series of AMAG and individual discussions are typically held to attain greater clarity about industry practices. More formal surveys and round-table discussions follow. Industry position papers result from the process, as warranted.

Papers in this series include:

Of the institutions that are currently regulated in the U.S. (viewed as mandatory or opt-in Basel II institutions); 27 are currently members of AMAG. As of 2016, the member firms are:

  • Bank of America
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  • Bank of Montreal
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  • Bank of the West
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  • BB&T
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  • BNY Mellon
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  • Capital One Bank

  • Citibank
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  • Citizens Bank/RBS
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  • Credit Suisse
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  • Deutsche Bank
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  • GE Capital
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  • Goldman Sachs
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  • HSBC
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  • JP Morgan Chase
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  • Keycorp
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  • Morgan Stanley

  • M&T Bank
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  • Northern Trust
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  • PNC
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  • Royal Bank of Canada

  • Santander Bank
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  • State Street
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  • SunTrust
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  • TD Bank
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  • Union Bank of California
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  • US Bank
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  • Wells Fargo

 The Risk Management Association (RMA) provides the support team and facilitation for the AMAG.

Contacts for further Information

Ed DeMarco, Member, AMAG
RMA General Counsel and Director of Operational Risk  
The Risk Management Association  
215-446-4052  
edemarco@rmahq.org

Sylwia Czajkowska, Member, AMAG
Associate Director of Operational Risk  
The Risk Management Association  
215-446-4071  
sczajkowska@rmahq.org

Douglas G. Hoffman, Facilitator, AMAG
President  
Operational Risk Advisors LLC  
203-259-4730  
doug.hoffman@opriskadvisors.com