Basel opts for aggregate bank capital output floor
Banks will have more flexibility on use of internal models, but calibration still undecided
William Coen, the secretary-general of the Basel Committee on Banking Supervision, has publicly confirmed the committee will opt to impose an aggregate floor on banks’ internal regulatory capital models, rather than individual floors on specific risks.
The plan involves using standardised approaches for calculating risk-weighted assets (RWAs) as a floor for internal model outputs. Speaking at the City Week conference in London on May 25, Coen said: “In the end, the committee has chosen the
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