1. The table below reports the gross operating income (in million euros) for all the business lines of a bank, over the last three years. Compute the banks capital charge against operational risk under both the basic indicator and the standardised approach of Basel II. Explain the causes underlying the difference between the two results.

t-3 t-2 t-1 Business line Corporate finance 40 100 40 30 -120 40 Retail banking Payments and settlements Asset management Bank 40 60 40 30 20 190 - 30 230 5 -20 t-3 t-2 t-1 Business line Corporate finance 40 100 40 30 -120 40 Retail banking Payments and settlements Asset management Bank 40 60 40 30 20 190 - 30 230 5 -20