Banks reject Basel’s IRB data shortage claim
Internal models remain more accurate than standardised approaches, say industry responses
Banking industry lobbyists will challenge proposed limits on credit risk capital modelling in comments to the Basel Committee on Banking Supervision this week, claiming there is enough data to measure the risk of many large corporates and financial institutions. Forcing banks to use standardised models for these borrowers would make capital less sensitive to risk, and would not make the resulting numbers easier to understand, they argue.
"The way Basel has defined these so-called low-default
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