<P> Advanced measurement approaches (AMA) is one of three possible operational risk methods that can be used under Basel II by a bank or other financial institution . The other two are the Basic Indicator Approach and the Standardised Approach . The methods (or approaches) increase in sophistication and risk sensitivity with AMA being the most advanced of the three . </P> <P> Under AMA the banks are allowed to develop their own empirical model to quantify required capital for operational risk . Banks can use this approach only subject to approval from their local regulators . Once a bank has been approved to adopt AMA, it cannot revert to a simpler approach without supervisory approval . </P> <P> Also, according to section 664 of original Basel Accord, in order to qualify for use of the AMA a bank must satisfy its supervisor that, at a minimum: </P> <Ul> <Li> Its board of directors and senior management, as appropriate, are actively involved in the oversight of the operational risk management framework; </Li> <Li> It has an operational risk management system that is conceptually sound and is implemented with integrity; and </Li> <Li> It has sufficient resources in the use of the approach in the major business lines as well as the control and audit areas . </Li> </Ul>

Who has prescribed guidelines on advanced measurement approach