652. In the Standardised Approach, banks’ activities are divided into eight business lines: corporate finance, trading & sales,
retail banking, commercial banking, payment & settlement, agency services, asset management, and retail brokerage. The business
lines are defined in detail in Annex 8 of Basel II Pillar 1.
653. Within each business line, gross income is a broad indicator that serves as a proxy for the scale of business operations
and thus the likely scale of operational risk exposure within each of these business lines. The capital charge for each business
line is calculated by multiplying gross income by a factor (denoted beta) assigned to that business line. Beta serves as a
proxy for the industry-wide relationship between the operational risk loss experience for a given business line and the aggregate
level of gross income for that business line. It should be noted that in the Standardised Approach gross income is measured
for each business line, not the whole institution, i.e. in corporate finance, the indicator is the gross income generated
in the corporate finance business line.