UK Basel 3.1: Operational risk - standardised approach
On 20 January 2026, the PRA published Policy Statement (PS) 1/26, setting out the final Basel 3.1 policy package. This comprises PRA Rulebook instruments, supervisory statements, statements of policy, and the associated reporting and disclosure templates and instructions.
The package largely confirms the near-final policy, with only minor amendments, corrections and clarifications (alongside targeted market risk updates consulted on separately).
Basel 3.1 will take effect on 1 January 2027, while the FRTB Internal Model Approach will come into effect on 1 January 2028.
Below is a summary of the key changes to calculating own funds requirements for operational risk.
Key change: All existing operational risk approaches [Basic Indicator Approach (BIA), Standardised Approach (SA), and Advanced Measurement Approach (AMA)] are replaced by the new Standardised Approach (SA) for operational risk.
A summary of the new approach is given below (SA):
Table 1: The following table outlines the Business Indicator range and associated marginal coefficient:
Note 1: Items to be included in the calculation of each BI element are given below:
Items to be included in ILDC:
Items to be included in SC:
Items to be included in FC:
Items excluded from the BI calculation:
