HKMA’s tight control over default data inputs reduces RWA significance
Hong Kong doesn't give local banks any latitude over the data inputs to their risk models, says one risk manager from the Special Administrative Region
The decision by the Hong Kong Monetary Authority (HKMA) to specify the model inputs for calculating risk weighted assets (RWAs) by local banks means the scope for disparity in the figures is limited, according to to Edwin Yuen, chief analytics officer at the Bank of China Hong Kong.
The Financial Stability Board (FSB) recently published a report calling for banks to give more detail on their approach to RWAs, arguing that it was "impossible to tell" how different banks had arrived at their final
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