Party’s over as more banks drop internal models for market risk

At least three systemic banks in Europe intend to ditch IMA for capital requirements

In the risk management nightclub, there’s a VIP room at the back reserved for the select group of banks that are allowed to use internal models for regulatory capital. But the lights are going up and the crowd is thinning, as more of the exclusive occupants join the rest of the partygoers on the main dancefloor, in the standardised section.

Last year, Risk.net reported that it knew of one European global systemically important bank (G-Sib) that was planning to stop using its own models to