Survey shows modifications could lower Basel II credit risk charges
Banks using a more complex risk measurement approach under the Basel II bank accord, if potential modifications are put in place, would have lower credit risk capital charges than under the current Basel I accord.
A key aim of the of the proposed risk-based Basel II capital adequacy accord is to ensure that that there would be an incentive for banks to use the so-called foundation internal ratings-based (IRB) approach to calculating credit risk capital charges.
The results of so-called QIS 2.5, a limited quantitative impact study conducted in November last
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