HSBC pares down market RWAs after model update, VAR change
Risk-weighted assets for trading exposures fall $2.8 billion quarter on quarter
Updates to risk models and methodologies contributed to a 9% fall in HSBC’s market risk-weighted assets (RWAs) over Q4, wiping out about $200 million from the regulatory capital charged against its trading activities.
The UK bank reported total market RWAs of $28.5 billion at end-December, down from $31.3 billion three months prior and $29.9 billion a year ago. Of these year-end RWAs, 70% were calculated using the internal models approach (IMA) and 30% the regulator-set standardised approach
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