However, the development of banks’ activity and the complexity of their transactions have considerably increased their exposure to operational and legal risks. The new Accord grants intermediaries complete freedom of initiative. The rules and risks have been defined, in analytical terms, borrowing from operational best practices.
The models and parameters for the measurement of capital requirements and their application are developed by each individual intermediary. The supervisory authorities assess them for approval and then oversee compliance. In response to an initiative of the Bank of Italy, among others, the Accord provides for specific solutions designed to produce a better evaluation of credit risk for small loans.