PRA's Pillar 2A consultation may point way ahead for AMA

Pillar 2A consultation lays out the PRA's capital methodology. Experts suggest this could be an incentive for modelling, a way to increase capital in the system, or even a snapshot into Basel's thoughts on the future of the AMA

pillars
Pillars of wisdom? PRA is consulting on Pillar 2A capital rules

Hanoi at the turn of the twentieth century: facing an infestation of sewer rats, the colonial government put a bounty on the heads (or, in fact, the tails) of the pests. Rat catchers throughout Hanoi were paid for every rat's tail they brought in. But, puzzlingly, the steady increase in bounty paid was not matched by any decrease in rats.

In a stroke of entrepreneurial genius, the rat catchers had realised it made more financial sense to breed the rats and then cut off their tails, leaving the

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