Calculation of the operational risk capital charge using the basic indicator approach in the Turkish banking sector and evaluation of the Basel III final operational risk criteria

One of the main activities of the banks operating as a trust institution is to collect deposits from the depositors and to evaluate the deposits with various financial instruments in order to make a profit in the direction the bank's strategy. This means that banks are responsible to the depositors they collect deposits from, and therefore to the society in which they live. When we look at the history of banking, the need to impose a minimum capital adequacy requirement on banks has emerged by international authorities due to the fact that economic and social effects cause exponentially large losses in cases where this responsibility is not fulfilled sometimes. Developments in the international banking sector after the implementation of the Basel I Capital Adequacy Accord, which emerged for this reason, caused the existing capital adequacy accord to be insufficient, and paved the way for a new capital accord. Accordingly, the "Basel II New Capital Agreement" was presented to the information of the stakeholders in drafts published on various dates and was put into practice at the beginning of 2007 after the feedbacks regarding the new regulations. In the study we have carried out, the effect of the financial data, which forms the Operational Risk Capital Charge, calculated with the Basic Indicator Approach in the Turkish banking sector in line with the Basel II Capital Adequacy Framework, has been determined by numerical analysis method. From this point of view, it has been shown to what extent the framework drawn by the Basel II Capital Adequacy Accord reflects the issues reported in the definition of operational risks, which are explained as the possibility of loss, including legal risk, arising from inadequate or unsuccessful internal processes, people and systems, or external events. In addition, criteria in the Basel III Final Capital Adequacy Accord regarding operational risk management have been evaluated, which will enter into force in the Turkish banking sector as of January 2023. The possible effects of the decisions that the Basel Committee has left to the local regulatory and supervisory authorities, and therefore to the will of the Banking Regulation and Supervision Agency for the Turkish banking sector, on the Turkish banking sector have been evaluated.