The rule in plain words
The ten-year average Total amount of operational losses (net of recoveries) is calculated as the sum of the annual amounts over the previous years from T to T-9
In row "Total amount of operational losses net of recoveries (no exclusions)" (0060) of Operational risk: part 5 - historical losses (OPR) (OF16.00.01.05): if anything is reported in 10 columns (listed below), "Ten-year average" (column 0110) must equal the sum of 10 columns (listed below) divided by the number of values reported in 10 columns (listed below).
The headline gives only the template and the kind of check, because the rule is too long to say in a headline. The plain words above say all of it.
What to do if your return fails it
- 01Open the tables below and find the cells the rule reads.
- 02The check applies only when its first part holds in your return. When it does, the second part must hold too: fix the second part, or correct the first.
- 03The Bank of England allows a small rounding difference, worked out from the decimals each value is reported with.
- 04It runs only when your filing indicators mark OF16.00.01.05 as reported.
- 05This is a warning. It does not stop the return on its own, but your supervisor may ask you to explain it.
The cells it reads
Operational risk: part 5 - historical losses (OPR) (OF16.00.01.05)
Row
- R0060Total amount of operational losses net of recoveries (no exclusions)
Columns
- C0010T-9
- C0020T-8
- C0030T-7
- C0040T-6
- C0050T-5
- C0060T-4
- C0070T-3
- C0080T-2
- C0090T-1
- C0100T
- C0110Ten-year average
Operational risk: part 5 - historical losses (OPR) (SC16.00.01.05)
Row
- R0060Total amount of operational losses net of recoveries (no exclusions)
Columns
- C0010T-9
- C0020T-8
- C0030T-7
- C0040T-6
- C0050T-5
- C0060T-4
- C0070T-3
- C0080T-2
- C0090T-1
- C0100T
- C0110Ten-year average
Which returns it applies to
Line4 Check runs it on the own funds (PRA001) and own funds for SDDTs (PRA116) returns on Bank of England banking taxonomy 4.1.1. The Bank of England applies it to own funds for SDDTs (PRA116) and own funds (PRA001) returns, as a warning.
The Bank’s own words and formula
The first paragraph of the plain words above is the Bank of England’s own, word for word, from its list of validations. The second spells out its formula, with each cell named from its templates.
Show the formulaShowHide
The Bank of England's formula. Cells are written as {t: table, r: row, c: column}.
If count({t: OF16.00.01.05, r: 0060, c: 0010; 0020; 0030; 0040; 0050; 0060; 0070; 0080; 0090; 0100}) != 0 then {t: OF16.00.01.05, r: 0060, c: 0110} = sum({t: OF16.00.01.05, r: 0060, c: 0010; 0020; 0030; 0040; 0050; 0060; 0070; 0080; 0090; 0100}) / count({t: OF16.00.01.05, r: 0060, c: 0010; 0020; 0030; 0040; 0050; 0060; 0070; 0080; 0090; 0100}) else true()Other rules on Operational risk: part 5 - historical losses (OPR) (OF16.00.01.05)
- Operational risk: part 5 - historical losses (OPR): a conditional check (boe_b0808)
- Operational risk: part 5 - historical losses (OPR): a conditional check (boe_b0810)
- The ten-year average Total number of exclusions takes into account the sum of the annual amounts over the previous years from T to T-9 (boe_b0807)
- Operational risk: part 5 - historical losses (OPR): a conditional check (boe_b0811)
- Operational risk: part 5 - historical losses (OPR): a conditional check (boe_b0806)
- The ten-year average Total number of exclusions takes into account the sum of the annual amounts over the previous years from T to T-9 (boe_b0812)
- Operational risk: part 5 - historical losses (OPR): a conditional check (boe_b0805)
- Operational risk: part 5 - historical losses (OPR): a conditional check (boe_b0813)
Every PRA banking rule on OF16.00.01.05
Checks like this one, run at the point of submission, are the first step to real-time supervision. Line4 builds SupTech software for financial regulators that runs checks like these as each return arrives.