Model changes threaten 30% rise in Nordea's RWAs
Imposition of new risk weight floors will harm bank's capital ratio
Nordea’s risk-weighted assets are primed to jump €36 billion ($41 billion) in the final quarter of the year following a flurry of regulatory changes affecting its internal models.
The Nordic bank has been on a de-risking spree in recent years, cutting RWAs to €121 billion at end-September from €147 billion three years earlier. But this progress will be reversed and then some as a series of supervisor-enforced changes to its internal ratings-based (IRB) models come into effect.
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