Incremental risk charge (IRC)

When market and credit risk collide

The financial crisis highlighted that interactions between market risk and credit risk could expose banks to greater risks than had been assumed. Banks are responding by altering their structure and the models they use – but it is by no means an easy…

Uncertain liquidity ratios

Like their counterparts elsewhere, South African banks are bracing themselves for a round of changes to Basel II rules. But it is the implications for liquidity and not capital that most concern market participants.

The shock of the interaction

Banks have long talked about enterprise risk management, but many have historically measured risk types separately and aggregated the results. The financial crisis has highlighted that credit and market risk are closely linked. What are the challenges to…

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