This is simple. The capital charge is simply a multiple of the gross revenue of an activity, averaged over the last three years. With reference to Stage 3, gross revenue is the sum of net interest margin and non-interest income (such as fees).
|Business lines||Beta factors|
|Trading and sales||18%|
|Payment and settlements||18%|
Capital ≥ beta factor × average gross income of last 3 years.
For example, in the case of retail banking, this is calculated as follows:
CapitalRetail ≥ 12% × average gross income of last 3 years.
Again, the risk-weighted asset for operational risk is equal to:
RWAoperational risk = capital × 12.5 ...