Introduction of Operational Risk in Basel Accords
Basel I (1988) → Focused only on credit risk and market risk; operational risk was not yet included.
Basel II (2004) → Introduced operational risk as a separate category, subject to capital requirements.
Basel III (2010) → Strengthened capital and liquidity requirements but did not introduce operational
risk.
Basel IV (2017, still evolving) → Adjusts Basel III reforms but does not introduce operational risk as a
new category.
Why Answer B is Correct
Basel II (2004) was the first to introduce operational risk as a risk requiring a capital charge.
Why Other Answers Are Incorrect
Option
Explanation
A . Basel I Incorrect – Basel I focused on credit risk and market risk, with no capital requirements for
operational risk.
C . Basel IIIIncorrect – Basel III strengthened Basel II but did not introduce operational risk.
D . Basel
IV
Incorrect – Basel IV refines Basel III but does not introduce operational risk as a new capital
charge.
PRMIA Reference for Verification
Basel II (2004) Operational Risk Framework
PRMIA Operational Risk Management Guidelines
