Definition of Internal Loss Data (ILD)
Internal Loss Data (ILD)refers tohistorical records of actual operational lossesincurred by a bank.
These losses are used forrisk assessment, capital calculations, and trend analysisunder Basel III’sOperational Risk Framework.
Key Characteristics of ILD
Captures actual past loss events, such as fraud, system failures, and compliance breaches.
Supports the identification of risk trendsand weak control areas.
Used for operational risk capital modeling, along with external loss data and scenario analysis.
Why Other Answers Are Incorrect
Option
Explanation
A. It consists of near miss operational loss incidents of a bank.
Incorrect– ILD capturesactuallosses, while near misses are reported separately.
C. It consists of the Key Risk Indicators of a bank.
Incorrect–KRIs are forward-looking risk metrics, while ILD focuses onhistorical data.
D. It consists of scenario data developed to calculate the future operational loss incidents of a bank.
Incorrect– ILD ishistorical, whereas scenario data is used forpredictive analysis.
Basel III & PRMIA Operational Risk Data Framework
PRMIA Risk Management Standards for ILD
PRMIA References for Verification
