Amid increased size and complexity of the banking industry, operational risk has a greater potential to transpirein more harmful ways than many other sources of risk. This paper provides a succinct overview of the currentregulatory framework of operational risk under the New Basel Capital Accord with a view to inform a criticaldebate about the influence of varying loss profiles and different methods of data collection, loss reporting, andmodel specification on the reliability of operational risk estimates and the consistency of risk-sensitive capitalrules. The presented findings offer guidance on enhanced market practice and more effective prudentialstandards for operational risk measurement.