SMFG Capital Ratio Information ■  Operational Risk 1. Operational Risk Equivalent Amount Calculation Methodology 2. Outline of the AMA (1) Scenario Analysis through Risk Control Assessments A. Preparation of Data Input into the Quantification Model SMFG adopted the Advanced Measurement Approach (AMA) for exposures as of March 31, 2008. As of March 31, 2011, the following  consolidated subsidiaries have also adopted the AMA, and the remaining consolidated subsidiaries have adopted the Basic Indicator  Approach (BIA).  Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Card Company, Limited, The Japan Research Institute, Limited, SMBC  Friend Securities Co., Ltd., Sumitomo Mitsui Finance and Leasing Co., Ltd., Kansai Urban Banking Corporation, The Japan Net  Bank, Limited, SMBC Guarantee Co., Ltd., SMBC Finance Service Co., Ltd., THE MINATO BANK, LTD., SMBC Center Service Co.,  Ltd., SMBC Delivery Service Co., Ltd., SMBC Green Service Co., Ltd., SMBC International Business Co., Ltd., SMBC International  Operations Co., Ltd., SMBC Loan Business Service Co., Ltd., SMBC Market Service Co., Ltd., SMBC Loan Administration and  Operations Service Co., Ltd., Sumitomo Mitsui Banking Corporation Europe Limited and Sumitomo Mitsui Banking Corporation  (China) Limited. Among consolidated subsidiaries adopting the BIA, the following companies are preparing to implement the AMA. Cedyna Financial Corporation, SMBC Nikko Securities Inc. An outline of the AMA for operational risk management is described in the section on Risk Management. In this section, we would like to  present an explanation of the preparation of data that is input into the quantification model and the verification of scenario assessment using  internal loss data, external loss data, and Business Environment and Internal Control Factors (BEICFs). We will also give an outline of the  methodology for measuring the operational risk equivalent amount (“required capital”) using the quantification model. In order to estimate the frequency of occurrence of “low-frequency and high-severity” events, which is the purpose of risk control  assessment, we estimate the loss frequency in terms of four loss amounts (¥100 million, ¥1 billion, ¥5 billion, and ¥10 billion) for  each scenario, then input the total amount by loss event type for each entity, namely, SMFG (consolidated), SMBC (consolidated), and  SMBC (nonconsolidated), into the quantification model. At SMFG and SMBC, by using a different assessment method according to loss event type and organizational classification, we  obtain a proper grasp of operational risk profile of the Group. The following section provides typical calculation examples for scenarios  of SMBC domestic business offices. SMFG  2011 201 Internal Loss Data External Loss Data B. Verification A. Data input Risk Mitigation Initiatives (1) Scenario Analysis through Risk Control Assessments (2) Measurement  Using the Quantification Model BEICFs