According to the last proposals by the Basel Committee, banks are allowed to use statistical approaches for the computation of their capital charge covering financial risks such as credit risk, market risk and operational risk. It is widely recognized that internal loss data alone do not suffice...

This paper compares the use of two different methodologies for merging data from different sources in developing or extending a microsimulation model. The first uses a relatively simple means-based methodology, and the second uses regression. The advantages and disadvantages of each are...