Statistical spin may decide severity of trading book rules
Capital increase levied by Basel Committee on Banking Supervision could depend on use of mean versus median figures
A dispute over the correct interpretation of results from the Basel Committee’s fourth quantitative impact study (QIS) into proposed trading book capital rules is expected to have a big impact on the severity of the final version, which is due to be published in December.
Specifically, regulators and the industry disagree fiercely over whether the median or mean is the right figure to use to assess the overall rise in bank capital.
“The industry has been looking at average data, which include
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