In our note, we explain that the Committee is pursuing a “hybrid” approach to recognised operational risk capital across jurisdictions for such institutions. Under this hybrid approach, a banking group would be permitted - subject to supervisory approval - to use a combination of stand-alone AMA calculations for significant internationally active banking subsidiaries and an allocated portion of the group-wide AMA capital requirement for its other internationally active subsidiaries. As a consequence: First, a significant, internationally active institution will be expected to calculate its capital needs under the AMA on a stand-alone basis. It will be able to consider a well-reasoned estimate of diversification within its own operations, though not across the rest of its group. Where a significant internationally active institution is a subsidiary of a larger organisation, it will be allowed to rely on resources, data, and parameters calculated at the group level. Second, an institution that is not considered significant could receive approval from its supervisors to apply a capital charge against operational risk that is allocated to it from a group-wide AMA calculation. The principles articulated in the January note are intended to facilitate the implementation efforts. They should, moreover, ease the burden on institutions that adopt the AMA across jurisdictions yet still respect host countries’ laws that may require local subsidiaries to comply with a minimum standard on their own. Achieving this balance should encourage more institutions to improve their management of operational risk and to strive to adopt more advanced approaches as their capabilities grow.

This is why in many countries the governments have tried to make the agents amenable to public’s requirements through the implementation of such devices as “people’s charters”. The result is the production of the agent remaining at low quality, becoming unreliable and failing to satisfy the users. The same fate has befallen the governmental organisations that produce and supply statistics to the public free of charge. Many have witnessed the increasing occurrence of the “misuse of statistics” by those who produce and supply statistics to the market. The Google search machine has documented some 2.5 million cases of the misuse of statistics from around the world. The misuse of statistics Why does the production of statistics become unreliable? There are many pitfalls to which statisticians fall when they produce statistics. Wikipedia, the cyber-encyclopaedia, has listed out these errors often committed by statisticians. According to Wikipedia, “a misuse of statistics occurs when a statistical argument asserts a falsehood”. It could be due to both accidental and purposeful. When it is purposeful, it is always perpetrated in order to gain an undue benefit to the perpetrator. The danger with the wrongful use of statistics is the creation of a statistical fallacy that would be costly to those who make use of the deliberately doctored statistics. Such statistics are damaging to the quest of knowledge in the sense that, once they are rooted in the minds of the people, it would take years to correct the falsehood that it would have created in the society.